Georgia Attorney General Sam Olens said he has “significant concerns” about a proposal to reduce loan balances for some homeowners as part of a settlement of a nationwide foreclosure probe, joining at least seven other states that have criticized such a plan.
A deal with the top mortgage servicers in the U.S. that includes writedowns could encourage homeowners who are current on their loans to stop making payments, Olens, a Republican, said today in a telephone interview.
“You’re declaring in advance who the winners and losers are,” Olens said. “I’m a little concerned that this process disengages the normal market forces.”
Republican attorneys general in Virginia, Texas, Florida, South Carolina, Oklahoma, Nebraska, and Alabama have signed letters opposing the imposition of writedowns, which proponents call the most effective way to modify a home loan.
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