16 Jan, 2008
Fitch Ratings has advocated Lehman Brothers' plans to develop
a loan modification programme for its residential mortgage backed
The lender has proposed a number of strategies, including payment
deferral, extension of maturity dates and amended interest rates.
Gregg Kohansky, senior director at Fitch, says: "Delinquent
borrowers could be encouraged to pay through an active strategy to
render their mortgage payments more affordable, thereby increasing
the payment rate on arrears mortgages.
"If a borrower default can be prevented by loan modification, then
this could also result in lower defaults and losses on affected