WASHINGTON — Decisions on whether to modify a mortgage to prevent foreclosures must be made within 45 days, as a result of an agreement announced today by officials of the mortgage industry and lenders and loan servicers.
The agreement, by officials in the government-created HOPE NOW alliance, also states that borrowers will receive an acknowledgment of their request within five business days. Lenders would also promise to stay in touch with borrowers while reviewing an application.
Lenders would also accept a deed in lieu of foreclosure or a short sale in lieu of going through with a foreclosure.
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The 27 firms in the alliance, which was created last summer at the beginning of the subprime crisis, claim their have been 1.6 million loan workouts during that period.
Under Treasury Secretary for Finance Robert K. Steel said the agreement will help more homeowners obtain relief.
"The HOPE NOW procedures announced today will allow even more homeowners to get help faster. We are pleased to see the alliance members continually making improvements and expect them to maintain their efforts. As we have said, there is no one silver bullet to address every housing challenge, but if we continue pursuing a series of measures and initiatives, we can have a maximum impact," he said in a statement.
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