Can CPAs fix the sub-prime mortgage problem? One congressman wants them to give it a try.
According to CFO.com, Sen. Charles Schumer, D-NY, wants the Big 4 accounting firms to educate lenders about their options under Statement of Financial Accounting Standards (FAS) 140, titled “Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.” Recent guidance from the SEC makes it “more economically feasible for lenders to modify securitized loans when a default seems likely,” CFO.com reports, and Schumer wants lenders to be aware of that flexibility.
“Currently, according to Schumer, investors of securitized mortgages are still saying they are unable to refinance or modify loans because it would interfere with their off-balance sheet treatment of the loans,” the article states. “That has given mortgage borrowers on the brink of foreclosure little or no wiggle room to refinance their loans.”
Will the SEC’s guidance under FAS 140 make a difference at this point? Let us know what you think.