updated 3/3/2008 6:10:00 PM ET 2008-03-03T23:10:00

The Federal Reserve urged banks that service subprime mortgage loans to report on loan modifications in a "consistent way" to help monitor the effectiveness of relief efforts to struggling homeowners.

Foreclosures and late payments have soared on subprime loans — those made to people with blemished credit histories or low incomes. The Bush administration is working with the banking and mortgage industries to help certain distressed homeowners rework their mortgages.

"We strongly support efforts to improve the collection of data on loan-modification activities," Federal Reserve Governor Randall Kroszner said Monday. "We encourage the institutions we supervise that service subprime mortgage loans to report on their progress in a consistent way."

"This will make it easier for regulators, the mortgage industry, lawmakers and homeowners to assess the effectiveness of these efforts," he added.

The Fed, in a letter to financial institutions, called on banks to move to more standardized reporting in this area and recommended that banks consider using reporting standards used by the Hope Now alliance, an industry group trying to coordinate a response to the mortgage crisis.

Consistent loan modification reporting will "foster transparency in the securitization market and provide standardized data across the mortgage industry," the Fed said.

One of the relief efforts promoted by the administration is allowing certain subprime borrowers to temporarily freeze the rates on their subprime mortgages before they reset to sharply higher rates.

During a congressional appearance last week, Fed Chairman Ben Bernanke was asked about ways the Fed could help improve the collection of information on modifications of troubled home loans.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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