10.11 am, Sunday July 05 2009

Citi nears deal on home loan change

09:39 AEST Fri Jan 9 2009
By Alan Zibel
VIEWS: 0
| FLOCKS: 0
| comments0 comments so far

Citigroup Inc is in advanced talks with lawmakers on a plan to let bankruptcy judges alter home loans in an effort to prevent US foreclosures, a person briefed on the matter said on Thursday.

Until now, the banking industry has been ardently opposed to the proposal, which key lawmakers aim to attach to president-elect Barack Obama's economic stimulus legislation.

The so-called "cramdown" proposal has been backed by Democrats over the past year as a potential solution to the foreclosure crisis. An announcement on an agreement could come as soon as Thursday, said the person, who spoke on condition of anonymity because the talks were not yet completed.

The discussions, which involved Citigroup officials and the offices of Democratic Senators Richard Durbin, Charles Schumer and Christopher Dodd, focused on a compromise that would limit the proposal to loans made before the bill is signed.

To qualify, borrowers would need to demonstrate that they have exhausted all their options before filing for bankruptcy.

The talks between Citigroup and lawmakers were reported in The Wall Street Journal on Thursday. A Citi spokesman declined to comment.

The lending industry has long battled against the concept. They say that allowing bankruptcy judges to cut the interest rates and reduce what's owed on troubled borrowers' home loans would raise rates because lenders would have to charge more for loans that could be later altered by a judge.

"This would hurt the housing market at the exact time we're trying to stimulate it," Scott Talbott, chief lobbyist at the Financial Services Roundtable, said.

In an interview earlier this week, a lobbyist for the mortgage industry vowed to keep the bankruptcy judge plan out of the economic recovery bill.

"We think that's an unwise move that could delay the stimulus package," said Francis Creighton, the Mortgage Bankers Association's chief lobbyist.

In a speech on Thursday at George Mason University outside Washington, Obama asked Congress to work with him "day and night, on weekends if necessary" to pass an economic revival plan within the next few weeks so that it can be ready for his signature shortly after he takes office on January 20

Obama promised to rewrite financial regulations and pledged to launch "a sweeping effort to address the foreclosure crisis so that we can keep responsible families in their homes."

 
SHARE:
MESSENGER
FACEBOOK
MORE
Blog on Spaces
Add to delicious
Add to Digg
Share on MySpace
?
Share, bookmark, and save your favourite ninemsn articles and features.  Learn more.

Most popular

 Blind man sees after tooth implanted in eyeA blind British man has seen his wife for the first time after an incredible operation transplanted one of his teeth into his right eye.
 Sailors sent home amid sex scandalThe Royal Australian Navy has sent a group of sailors home after they allegedly challenged each other to have sex with as many female crewmates as possible.
 Shooting victim truckie farewelledCanberra grandfather Bob Knight, the innocent victim of a recent shoot-out in Sydney, has been remembered as "Bob the truckie", a regular on talkback radio.
 Pensioner's body unnoticed for five yearsThe body of an elderly British woman has been found in her home after lying undiscovered for up to five years.
 Skaf brothers banned from sharing cellThe notorious Skaf brothers have been permanently banned from sharing a prison cell with each other.
 TomKat drop by MCG to see 'Pies winTom Cruise and Katie Holmes made a surprise appearance at the MCG last night to watch a blockbuster AFL clash alongside good friend James Packer.
 Identical twins wed in confusing ceremonyA pair of identical twin sisters have married two identical twin brothers in a military ceremony in Russia.
 South China floods see 50,000 evacuatedMore than 50,000 people were evacuated in south China after the heaviest rains in years led to flooding and swollen rivers in recent days, state media reported.
 NSW swine flu cases double in 10 daysSwine flu is spreading faster in NSW with the number of confirmed cases doubling to more than 1200 in 10 days.
 Singer jailed over forced abortionMusic star Cheb Mami has been sentenced to five years in jail for trying to make a former lover undergo a forced abortion.
Michael Jackson (AAP)Colossal interestJackson memorial website inundated with some 500m hits. Sydney's new star VIDEO: Meet the first ever elephant calf to be born in Australia. Sarah Palin (AAP)Palin quitsResignation fuels speculation of a 2012 presidential run. The brides arrive at the altar. (Image supplied)Double trouble VIDEO: Identical twins marry in bizarre ceremony in Russia. Rapper 50 Cent and a fan. (Image supplied)50 cents worth VIDEO: Superstar rapper confronts geek over online 'dis' Bernie Madoff (AAP)Penthouse takenSwindler Bernie Madoff's wife evicted from $7m pad.
Deadly inferno Three-week-old baby and young girl killed as fire rips through London high-rise ... more photos Honey, what's a mark? James Packer takes Tom Cruise and Katie Holmes to the MCG for a spot of footy ... watch more Body unnoticed for years Remains of a pensioner found in her home after lying undiscovered for five years ... read more Seeing is believing A blind man sees his wife for the first time after a tooth was implanted in his eye ... read more Naked morale Office workers go nude for the day in "extreme" bonding exercise ... read more Edgy art Illusionist Edgar Mueller creates giant cave on London street ... read more Become a Nine News breaker Seen or heard something? Send tip-offs, images and video from your mobile or PC ... contact us
advertisement
Quarterback slayingNFL star Steve 'Air' McNair dead in apparent murder-suicide, police say
You need the latest version of Flash Player.
Enjoy the most vivid content on the web
Watch video without extra features
Interact with applications on your favourite sites
Upgrade now

page complete
Other ninemsn businesses: iSelect Mathletics RateCity
© 1997-2009 ninemsn Pty Ltd - All rights reserved