Today, the Wall Street Journal leads with a story headlined “Citigroup Feels Heat to Modify Mortgages” about how influential non-profits are “racheting up pressure” on lenders such as Citigroup to offer homeowners more affordable terms on their existing loans. These groups should be encouraged to keep up their great work, and servicers such as Citigroup should acknowledge their responsibility for the current crisis and act quickly to modify their sub-prime adjustable rate loans.

Moody’s Investor Service released a study in October showing that 16 servicers accounting for 80 percent of all sub-prime loans had modified fewer than 1 percent of loans scheduled to reset to higher monthly payments by the end of this year. By the end of next year, more than $600 billion in sub-prime adjustable rate mortgages are expected to reset at higher rates.

Last month, FDIC Chairwoman Sheila Bair urged lenders to fix these loans at their teaser rates for borrowers who are up-to-date on their payments, arguing that her proposal is the only way to avoid an even more widespread foreclosure crisis, since modifying each individual loan is far to labor-intensive to be practical.

ACORN and other non-profits are pushing for Bair’s proposal but with rhetoric that is appropriately more focused on the central role that lenders and servicers have played in creating the present crisis. Today’s Wall Street Journal article says, “ACORN and other non-profit community groups contend that mortgage servicers have no right to play hard-ball with borrowers. Sub-prime lenders, these groups say, talked customers into loans they couldn’t afford by encouraging them to overstate their incomes and basing loans on inflated appraisals. Anyone with steady enough income to make regular monthly payments should get a restructured mortgage, the groups argued.”

Kudos to ACORN and other non-profits for keeping the pressure on servicers to actually modify these loans and prevent the catastrophic effects that massive foreclosures are certain to have on neighborhoods and families throughout the nation.