I have been an active proponent of such streamlined systematic approaches to reduce transactions costs and to help mitigate foreclosure risk, and I strongly encourage market participants to adopt and to implement these fast-track modification proposals as quickly as possible. I applaud these efforts but also recognize that much more must be done.
Challenges remain, for example, with respect to ongoing constraints on servicing capacity to expedite work outs. Servicers must undertake the investment to overcome the capacity challenges and provide transparent and timely measures of the results. The Federal Reserve has been working with financial institutions and community groups around the country to address the challenges posed by problem loans.