Thursday, March 24, 2011

Not all AG's agree with Principal Write Downs

Four state attorneys general (AGs) have objected to the principal-reducing modification requirements proposed in the recent letter from federal regulators and some state AGs to mortgage servicers.

The AGs expressed their concerns in a letter to Iowa AG Tom Miller, who is widely seen as the lead investigator on the 50-state initiative, the Wall Street Journal reports.

"To the extent loan modification proposals should be included at all, they should be limited in scope and only address unlawful conduct at issue in this investigation - such as banks' improper handling of loan modification applications," the four Republican AGs wrote to Miller, a Democrat. The letter came from Kenneth Cuccinelli of Virginia, Pam Bondi of Florida, Alan Wilson of South Carolina and Greg Abbott of Texas.

The AGs do support some aspects of the draft proposal, which was sent to the nation's largest banks earlier this month. According to the Journal report, the four AGs wrote that they are "deeply troubled" by certain discoveries unearthed by investigations, such as the broad use of robo-signers and other documentation issues.