Regulators Want More Info on Loan Modifications

National banks and federally chartered thrifts will have to provide more information about loan modifications to their regulators and indicate whether they reduced the borrower’s monthly payment, left it the same or actually increased the burden. The Office of Comptroller of the Currency and Office of Thrift Supervision are concerned that so many modified loans defaulting again; even after having been modified.

The OCC and OTS want to know why! Our understanding of how many and why loan modifications go bad is critical to banks’ efforts to modify loans and will help inform lenders and policymakers as to what kind of modifications work, with particular focus on the effect of significant changes in monthly payments,” Comptroller John Dugan said.

Loan servicers will be able to indicate if they reduced the borrower’s monthly payment by more than 10% or less than 10%. They will also have to report if the borrower’s payment has been increased or remained the same.

Additionally it is expected that President Obama plans a major announcement regarding foreclosure and loan modification help for homeowners next week.