PR – both the ASF and the MBA have produced position papers in strong support of loan modifications (and the requisite favorable interpretation of the existing language of FAS 140). The ASF’s position paper can be found here:
I also have the MBA’s paper saved somewhere, I can post a link when I get a minute to look for it.
My industry source advises me that a forum was held several weeks ago by the FASB and it was well attended by regulators, mortgage servicers, attorneys, etc., and that the MBA paper was discussed at length. No objections were raised to the MBA’s analysis, including no objections by the FASB and the SEC reps in attendance. All indications are that the analysis is sound.
The ultimate result may well go beyond a favorable reading of FAS 140 in support of modifications and end up with the FASB modifying FAS 140 to clarify the accounting and regulatory issues surrounding loan modifications. I would not be surprised to see this happen and if the SEC is on board then it’s a done deal.
Reading FAS 140 and the ASF and MBA position papers is a good start to understanding what is going on out there and the magnitude of the players involved in opening the gates for loan modifications.
