A banker from Denver, who wants to keep mortgage workout programs from harming neighbors’ property values, has put forth a proposal for standardizing the process. A number of US banks are working on modification programs, but there isn’t a standard system in place for reviewing troubled mortgages, which Anita Padilla-Fitzgerald fears will drive down neighbors’ property values, according to the Denver Post.

Padilla-Fitzgerald has reportedly been in touch with US Rep. Ed Perlmutter, a Colorado Democrat and a member of the House Financial Services Committee, about her idea and is trying to drum up support among real estate agents.

The Post reports that Padilla-Fitzgerald, who owns MegaStar Financial, proposes helping troubled homeowners by setting up a formal, standard way to review troubled loans. She wants HUD-approved lenders, who have already been certified, to conduct the reviews. After a review the lender would have several options, according to the Post. However, debt forgiveness is not one of the options. Her proposed options include:

The plan would help the real estate market in several ways, Padilla-Fitzgerald theorizes. The review process would assure that assets are properly priced, and would capitalize on HUD loan officers’ experience. Also, she says, her plan would help struggling homeowners stay in their homes and help real estate values begin to stabilize.

“Foreclosure equals lower values, but so does modification. There is a way to help homeowners in trouble without hurting their neighbors,” Padilla-Fitzgerald told the Post.

I’m not sure her entire plan would work as she suggests, but I certainly admire her initiative. It’s people with common-sense ideas like her who may be able to help resolve the housing crisis sooner than later.

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