WASHINGTON — Facing pressure from Congress and consumer advocates, lenders are pledging to provide stronger evidence of their progress in reworking costly home loans to prevent borrowers from being foreclosed.
Under a plan endorsed by the White House, lenders have agreed to freeze interest rates on certain troubled mortgages and to guide qualified borrowers into more-affordable loans.
The plan is aimed at averting massive foreclosures as floating-rate loans adjust to higher payments. But since the effort was announced by President Bush in December, there has been scant evidence to determine its effectiveness, critics say.
Statistics released Thursday by an alliance of banks and mortgage lenders provided ammunition for both sides.
The Hope Now coalition said lenders' efforts to stave off foreclosure increased late last year, and more than two-thirds of delinquent sub-prime borrowers got assistance during that period.
Loan companies helped 545,000 borrowers with delinquent sub-prime loans during the second half of 2007, compared with 386,000 in the first half of 2007.
But much remains unanswered. The majority of actions were repayment plans, which typically give borrowers more time to catch up on delinquent payments. Consumer advocates say these may simply put off the day of reckoning for troubled borrowers, who will still face payments they cannot afford.
Hope Now described other actions only as "modifications" without explanation.
The information gap has raised doubts about the White House-backed initiative and sparked legislative proposals that would require lenders -- who usually keep such details confidential -- to tell regulators more about their efforts to help strapped borrowers.
Lenders "say they're doing all these things, they're trying all these modifications," said John Taylor, chief executive of the National Community Reinvestment Coalition. "But you don't really know what they're doing.
"Part of the problem is secrecy from top to bottom of how things work," he added. "It's not in the consumer's interest at all."
With the economic fallout of foreclosures spreading, the administration faces pressure to document more clearly what is going on. Loan firms are also under pressure to help 1.2 million borrowers facing higher rates but who are current in their payments and aren't absentee owners (a test designed to rule out speculators).
