http://www.boston.com/dailyglobe2/261/business/Lenders_pledge_to_be_flexible_with_late_fees+.shtml

Lenders pledge to be flexible with late fees

By Bruce Mohl, Globe Staff, 9/18/2001

Banking officials and government regulators are promising that consumers won't be penalized financially as a result of last week's terrorist attacks, agreeing to waive late fees on bill payments and in some cases suspending mortgage foreclosures.

Many credit card companies and mortgage lenders said they were temporarily waiving late fees, due to the slowdown in mail deliveries. Several credit card companies said they were also willing to increase credit limits.

A spokeswoman for the Mortgage Bankers Association said many of its 2,800 members were likely to follow the lead of the US Department of Housing and Urban Development in providing mortgage relief to people directly affected by the attacks.

Relief for those directly affected who have loans insured by the Federal Housing Administration includes a 90-day moratorium on foreclosures, the waiver of late charges, and the suspension of delinquency reports to credit bureaus.

''We realize that we're all in this together,'' said John Hall, spokesman for the American Bankers Association in Washington.

Hall said computer systems at some institutions may automatically assess a late fee or an interest rate penalty, but banks will remove it immediately if the customer notifies them.

A check of several credit card companies yesterday found policies of varying specificity. Discover Financial Services, for example, has altered its internal systems to waive late charges on any bill mailed after Sept. 11, the day of the terrorist attacks.

A Citibank spokeswoman said the bank has no set policy, but will handle situations case-by-case.

'We will be flexible,'' said Maria Mindler. ''Obviously, we don't want to add any extra financial burden.''

Mail delivery slowed markedly last week in the wake of the terrorist attacks in New York and Washington and the shutdown of the nation's airports. Although airports opened over the weekend, bank officials said that mail deliveries are returning to normal only slowly.

Federal regulators have urged banks to be flexible.

On Wednesday, the Office of the Comptroller of the Currency urged credit card issuers and mortgage services to extend grace periods before assessing late fees or initiating default or penalty pricing.

The Federal Reserve Bank followed on Friday with a similarly worded statement.

HUD Secretary Mel Martinez said those directly affected by the attacks - the survivors of those who died and those who lost their jobs - deserve relief. That includes the 90-day moratorium on foreclosures and the waiver of later charges.

It does not, however, include loan forgiveness or any assistance to survivors struggling to pay rent on an apartment.

A spokeswoman for the Mortgage Bankers Association, whose members would handle many of the loans not insured by the FHA, said many institutions have already adopted many of the same HUD measures. She said some members have also postponed loan payments and held off on foreclosures.

-- Anonymous, September 18, 2001