CHAIRMAN FRANK APPLAUDS THE SEC FOR FAS 140 CLARIFICATION

Washington, DC - House Financial Services Chairman Barney Frank today offered the following statement applauding SEC Chairman Christopher Cox and the SEC staff for their letter on FAS 140.  In June, the Chairman sent a letter to the SEC asking for clarification on the accounting standard.  FAS 140 provides accounting standards for transfers of financial assets that become part of mortgage-backed securities, and Chairman Cox’s letter clarifies that institutions can make loan modifications when a default is reasonably foreseeable, rather than waiting until the borrower actually defaults.

“I congratulate Chairman Cox and the SEC staff for their prompt response to my letter on FAS 140.  This is a constructive approach that will allow mortgage lenders to provide help at the earliest possible moments to people who might otherwise be trapped in bad loans or forced into foreclosure.”

Please click on the following link for a copy of Chairman Frank and other members of Congress’ letter to Chairman Cox dated June 15, 2007: http://www.house.gov/apps/list/press/financialsvcs_dem/061507_frank_letter_to_cox_re_fas_140.pdf

Please click on the following link for a copy of Chairman Cox’s July 25, 2007 response:  http://www.house.gov/apps/list/press/financialsvcs_dem/sec_response072507.pdf