The largest trade group representing the U.S. mortgage industry on Tuesday told U.S. accounting rulemakers that lenders need to use more flexible bookkeeping if they are to save home loans headed for foreclosure.
The Mortgage Bankers Association argued that the authors of today's accounting rules did not envision a time of widespread mortgage failures on the scale now being faced. If they had, the trade group said, the accounting rules would have allowed more flexibility to easily modify many home loans before they fail.
"Unfortunately, no one at that time, the MBA included, could have foreseen a day in which thousands of loans that are in default (or in reasonably foreseeable default) might be modified within the same reporting periods," according to the nine-page letter addressed to the Financial Accounting Standards Board, which sets U.S. accounting rules.
Source : http://www.reuters.com/
The Mortgage Bankers Association argued that the authors of today's accounting rules did not envision a time of widespread mortgage failures on the scale now being faced. If they had, the trade group said, the accounting rules would have allowed more flexibility to easily modify many home loans before they fail.
"Unfortunately, no one at that time, the MBA included, could have foreseen a day in which thousands of loans that are in default (or in reasonably foreseeable default) might be modified within the same reporting periods," according to the nine-page letter addressed to the Financial Accounting Standards Board, which sets U.S. accounting rules.
Source : http://www.reuters.com/
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