AUSTIN — Texas Attorney General Greg Abbott has delivered his pointers on the Lone Star state’s subprime-mortgage foreclosure crisis to more lenders despite doubts over their effectiveness.
Abbott announced earlier this week he had offered his “five measures” for minimizing the impact on Texas of the subprime meltdown to four more industry leaders – Citigroup, HSBC, Wells Fargo and Chase. Last month he enlightened Countrywide Mortgage, Litton Loan Servicing and EMC Mortgage.
The measures aim to further minimize foreclosures in Texas after rates rose 22 percent in the year to September 2007. They are based largely on converting adjustable-rate mortgages to fixed-rate, scrapping some fees and offering customers a mitigation process prior to foreclosure.
But one analyst pointed out that Abbott’s measures are unlikely to succeed because the lenders are largely regulated by the federal government, LNL reported late October. So state AGs like Abbott cannot offer real protection to borrowers, LNL quoted RealtyTimes columnist Peter G. Miller.
Nonetheless, Abbott remains optimistic that his office can work with the sector. “Mortgage lenders, loan servicers, and public officials must work cooperatively on behalf of Texas homeowners who are affected by the looming housing crisis,” he stated Tuesday.