Summary: | As supplemental information to FIL-76-2007 on the interagency "Statement on Loss Mitigation Strategies for Servicers of Residential Mortgages," the FDIC, the Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators (AARMR) encourage servicers to consider the borrower's ability to repay modified obligations, taking into account the borrower's total monthly housing-related payments as a percentage of the borrower's gross monthly income (referred to as the debt- to-income or "DTI" ratio). Attention should also be given to the borrower's other obligations and resources, as well as additional factors that could affect the borrower's capacity to repay. DTI ratios exceeding 50 percent will increase the likelihood of future difficulties in repayment and delinquencies or defaults. |
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To receive FILs electronically, please visit http://www.fdic.gov/about/subscriptions/fil.html . Paper copies of FDIC financial institution letters may be obtained via the FDIC's Public Information Center (1-877-275-3342 or 703-562-2200).
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Additional Related Topics:
- Nontraditional Mortgage Product Risks
- Subprime Mortgage Lending
- Workout Arrangements for Residential Borrowers
- Securitized Subprime Residential Mortgage Loans
- Implications of Restructuring Certain Securitized
- Residential Mortgage Loans
- Loss Mitigation Strategies