State attorneys general have sent major U.S. servicers a 27-page proposal that could force banks to write down mortgage principal for borrowers in certain situations, The Wall Street Journal reported Friday.
Citing sources familiar with the matter, the Journal report explains that the letter – which names the U.S. Department of Housing and Urban Development, the Federal Trade Commission, the Department of Justice and the Consumer Financial Protection Bureau – outlines a ‘code of conduct’ for servicers that would require them to first consider reducing loan balances in certain instances before modifications or foreclosure.
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SOURCE: Wall Street Journal
