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                <p>WASHINGTON – Leading House Republicans challenged a deal Wednesday that federal and state officials have offered to five big U.S. banks that would change the handling of foreclosures and force lenders to modify more mortgages.</p>
                <p>In a letter to Treasury Secretary Timothy Geithner, the five GOP lawmakers said the draft offer would reshape the rules long governing the mortgage industry. They posed more than dozen questions to Geithner about the proposal, including what the legal justification is for the federal and state governments to try imposing such sweeping changes.</p>
                <p>The lawmakers wrote that the proposal raised "significant concerns about its effect on the financial system, as well as concerns that the administration and state agencies are attempting to legislate through litigation."</p>
                <p>Federal regulators and attorneys general of the 50 states offered the terms to the large banks last week, following extended talks over revelations that the lenders had cut corners and used flawed documents to foreclose on many home borrowers.</p>
                <p>Asked about the GOP letter, Treasury, in a statement, said: "The mortgage servicing system we have today is broken, and we should work together to establish a stronger set of standards."</p>
                <p>Under the proposal, which would not need Congress' approval, lenders could be required to write down the value of their loans to borrowers who owe more than their homes are now worth. They reportedly would be forbidden from starting foreclosure proceedings while a homeowner is trying to modify their mortgage terms, and there would be an independent review if they denied a mortgage modification.</p>
                <p>The letter complains that the draft settlement would revive the Home Affordable Modification Program, the Obama administration's leading effort at preventing foreclosures, which the House GOP wants to abolish.</p>
                <p>It also asks Geithner to justify a part of the proposed deal that, the letter says, would use fines imposed on mortgage servicers to modify loans, including reducing the principal owed, for borrowers not affected by the processing irregularities in question.</p>
                <p>Iowa Attorney General Tom Miller has said he thinks a final deal is months away.</p>
                <p>The banks are Bank of America, Citigroup, JPMorgan Chase, Wells Fargo and GMAC, which together have about 6 in 10 U.S. home mortgages, according to Miller.</p>
                <p>The letter was signed by House Financial Services Committee Chairman Spencer Bachus, R-Ala., and Reps. Scott Garrett, R-N.J., Randy Neugebauer, R-Texas, Patrick McHenry, R-N.C., and Pete Sessions, R-Texas.</p>
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