[StBernard] La. Office of Financial Institutions Press Release

[Westley Annis]

STATE OF LOUISIANA

OFFICE OF FINANCIAL INSTITUTIONS

BATON ROUGE, LOUISIANA

PRESS RELEASE

December 5, 2005

The Commissioner of Financial Institutions has become aware through the
receipt of significant number of complaints that persons impacted by the
recent hurricanes, whose mortgage payments were temporarily deferred, are
now receiving demands for up to four payments at once to bring their
mortgage current or otherwise face possible foreclosure. 

This is clearly not in the spirit of what was intended when public officials
requested mortgage relief and assistance to the affected citizens. Most
people believed that the deferment and other relief were permanent and that
any missed payments during this grace period would simply extend the term of
the loan.

However, it should be noted that mortgages are binding contracts between
lenders and borrowers and each party is expected to live up the obligations
contained therein. Often times the company which receives the payments
(servicer) on a mortgage loan is not the ultimate owner of the loan.

They are simply collecting payments and disbursing escrow payments for a
fee. They are bound to charge fees and collect payments in accordance with
contracts and cannot without permission of the owner of the loan, modify the
agreement or terms.

I encourage borrowers to contact their lenders regarding payments near the
end of any forbearance period. They should inquire as to if the company
which they make payments to, is the holder of the loan or only servicing the
loan. If they are the holder of the loan, they should inquire about their
options available to them. If they are only servicing the loan they should
ask if the holder of the loan is offering any type of modification agreement
or extended deferment and if so, how to go about applying for it.

Finally, I encourage lenders to please continue to work with borrowers on
alternatives other than requiring loans be brought current in one lump sum.
Many of our citizens have lost income and incurred additional expense as a
result of an interruption in employment, evacuation, and/or receiving damage
to their houses. The complainants my staff has spoken to indicate that they
fully intend to stay in their homes and pay their loans in full, however;
the payment of up to four payments in one month is just not possible for
most.

For more information on disaster relief or to file a complaint regarding on
a mortgage company please refer to the following:

For state chartered banks, thrifts, credit unions and mortgage brokers and
lenders:

The Office of Financial Institutions www.ofi.louisiana.gov (225) 925-4660

For National Banks:

The Office of the Comptroller of the Currency www.occ.treas.gov (800)
613-6743

For Federal Thrifts:

The Office of Thrift Supervision www.ots.treas.gov (800) 958-0655

The Federal Financial Institutions Examination Council issued a press
release on November 30, 2005 which encourages federally insured financial
institutions to consider reasonable and prudent actions that could help the
critical financial needs of their customers affected by Hurricane Katrina.
The following is a link to the referenced press release:

http://www.ffiec.gov/press/pr113005.htm

CONTACT: Commissioner John Ducrest -- (225) 925-4660