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 January 13, 2009

Nonprofit Organization Calls for Loan Modification by Lenders
A nonpartisan research firm, The Center for Responsible Lending, released a report on Thursday, January 8. The report urges lending organizations to increase the modification of loans which were issued to subprime borrowers. The report stresses this need to control further economic damage.
The organization's findings showed that 1.5 million American families have lost their homes to date, with an additional 2 million in danger of also losing their homes to foreclosure.

The organization's president, Michael Calhoun stated that the foreclosure crisis lies at the root of the country's current recession; and that if the foreclosure rate continues at its current pace, any chance of a recovery would be hindered. Calhoun continues by stating that the "hemorrhaging" in the housing market must be stopped in order for any economic stimulus plan to be a success.

The Center's report asks the Treasury to implement rules regarding the government-sponsored Troubled Assets Relief Program. Proposed regulations would streamline loan modification programs which carry guarantees against default.

Lastly, the report urges Congress to act swiftly to end the ban on judicial loan modifications. This would help to prevent thousands upon thousands of foreclosures without the requirement of any taxpayer funds.