NEW YORK, and IRVING, Texas, Nov. 14 /PRNewswire/ -- Wilbur L. Ross, chairman and CEO of WL Ross & Co. LLC (WL Ross), and David M. Friedman, president and CEO of American Home Mortgage Servicing, Inc. (AHMSI), issued the following joint statement today in response to the streamlined mortgage modification plan (SMP) introduced on November 11 by the Federal Housing Finance Agency, Fannie Mae, Freddie Mac, and the HOPE NOW Alliance.

"We strongly support this new program, which will make it easier and faster for many at-risk homeowners to modify their mortgages and stay in their homes. Homeowners will benefit from the fast-track, systematic, and uniform approach that lenders will now apply to modify loans for many severely delinquent borrowers. Using a reasonable housing debt to income ratio test for affordability should allow loan servicers to make modification offers to eligible borrowers on an accelerated basis, thus freeing up critical resources to create customized work-out solutions to other borrowers who may need individualized attention. Also, by stemming foreclosures, the program will help stabilize communities.

As an active HOPE NOW Alliance member with a strong commitment to home retention, we believe that the SMP is positive news for struggling borrowers, whether their situations fit the program or not, because its announcement raises awareness that servicers have been offering and will continue to offer many tools to provide homeowners with the help they need.

For loans that do not meet the SMP eligibility criteria, AHMSI will continue to use its industry-leading and proactive home preservation approach. Through AHMSI's Home Retention Department and its Homeownership Preservation Office (HPO), AHMSI has actively worked with thousands of homeowners to provide work-out assistance to those who desire to remain in their homes and have demonstrated a capacity to repay their debts on modified terms that we determined would be affordable to the borrowers and in the best interests of the investors of the related loans.

For the six-month period ending October 2008, AHMSI successfully completed 19,921 loan modifications out of a population of 37,553 loans as to which loan modifications were attempted, for a modification completion ratio of 53%. This represents over 25%, on an annualized basis, of the delinquent loan segment of our portfolio.

HPO is dedicated to serving the needs of financially distressed borrowers. The HPO reaches out through counseling, loss mitigation and foreclosure prevention education. Its team members travel to areas with high delinquency rates throughout the country to counsel borrowers face-to-face and to participate in outreach events, including those sponsored by the HOPE NOW Alliance. In addition, HPO works closely with community, consumer, and government groups committed to helping homeowners remain in their homes and reducing the number of avoidable foreclosures.

As useful as the SMP will be for those borrowers who are eligible, about 90 percent of the more than 400,000 loans in AHMSI's portfolio are held by private investors, not by Fannie Mae or Freddie Mac, and AHMSI does not own any of the loans it services. We strongly encourage our investors and the investor trade groups to support the use of the SMP, as enhanced with a net present value floor feature, for securitizations not covered by the SMP. Using a market-standard housing debt to gross income ratio to arrive at an affordable and sustainable monthly payment, so long as that payment is in excess of the net present value of the liquidation proceeds were the loan to be foreclosed upon and sold is, in our view, a useful and supportable protocol to use to return loans to performing status and maximize recoveries to our investors.

About AHMSI

Established in April 2008, AHMSI services residential mortgage loans, including traditional, Alt-A, interest only and subprime and is one of the country's largest servicers of sub-prime and Alt-A loans. The company is headquartered in Irving, Texas, and operates as well through locations in Irvine, Calif., Jacksonville, Fla., and Pune, India. As of October 30, 2008, it managed a portfolio of more than $85 billion.

WL Ross, founded by Wilbur L. Ross, is a private equity firm based in New York City and currently oversees in excess of $5.0 billion in private investments. AHMSI is owned by several funds that are ultimately controlled by WL Ross.

For more information about AHMSI, please visit its website at www.ahmsi3.com.

SOURCE WL Ross & Co. LLC