Senate Banking Committee Chairman Chris Dodd (D-CT) and House Financial Services Chairman Barney Frank (D-MA) sent a letter to the heads of the bank regulatory agencies asking them to address whether banks are inflating the value of second mortgages on their balance sheets thereby discouraging proactive efforts to modify and restructure mortgage loans.

Across the country housing prices have dropped and many Americans negative equity.  Because they are “underwater,” these homeowners are unable to refinance, leaving them unable to make payments. 

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