Posts Tagged ‘Obama Administration’

HAMP Loan Modification Program Results Continue To Be Underwhelming

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The Treasury released its latest set of numbers today for the Home Affordable Modification Program (HAMP) through April, 2010.  According to the Treasury, 300,000 American homeowners have received permanent loan modifications under HAMP. This number has grown in recent months and that is good news. However, in light of the fact that foreclosures have continued at a rate that exceeds 300,000 for the 14th month and counting, the number of homeowners who have received help remains miniscule when compared to the number of homeowners who have lost their homes.

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“They Have Become Literal Sociopaths” –William Black On Bank CEOs

William Black,  author of “The Best Way To Rob a Bank Is To Own One” was interviewed by Bill Moyers on April 23 regarding the massive fraud that exists in our financial system and the role it played in the current financial crisis.  Read the transcript here or watch the video here.

Mr Black said that two things created the environment in which the financial crisis occurred:

1: No regulation

According to Mr. Black, this wasn’t a case so much of there being no regulatory authority to deal with the banks, although indeed, more regulations are needed, it was a case of the government being unwilling to act using existing laws, even after it was made aware of the impending crisis in subprime mortgages and the housing bubble.

He mentions former Fed Chairman Alan Greenspan’s refusal to use a 1994 law granting the Fed the ability to regulate all mortgage lenders after being advised that a housing bubble was developing and there was a major problem with sub-prime loans.

2: Compensation

Mr Black on CEOS:

We now have the entitlement generation as CEOs. They just plain feel entitled to being wealthy as Croesus with no responsibility, no accountability. They have become literal sociopaths

Further than that,  Mr. Black said that there are incentives at every level to cheat, to make deals regardless of the ramifications to others and to the economy as a whole.

So, with all of this fraud being uncovered, why aren’t people going to jail, or at the very least, why haven’t there been any criminal indictments handed down? Mr. Black also explained why:

There’s a huge part that is economic ideology. And neoclassical economists don’t believe that fraud can exist. I mean, they just flat out — the leading textbook in corporate law from law and economics perspective by Easterbrook and Fischel, says — I’ll get pretty close to exact quotation. "A rule against fraud is neither necessary nor particularly important." Right?

Notice how extreme that statement is. We don’t need laws. We don’t need an FBI. We don’t need a justice department. We don’t even need rules like the SEC. The markets cleanse themselves automatically and prevent all frauds. This is a spectacularly naïve thing. There is enormous ideological content. And it fits with class. And it fits with political contributions.

Do you want to look at these seemingly respectable huge financial institutions, which are your leading political contributors as crooks?

Watch the video, but not on a full stomach. Again, the link to it is here.

New Efforts To Aid Homeowners Won’t Cost The Taxpayers Another Dime

Further efforts to abate the foreclosure crisis won’t cost the taxpayer any additional money is the word from the Obama Administration. This includes the new HFA Hardest Hit allocations and revisions to HAMP to reward lenders who write down principle balances.

This is because all of the money that is being used is coming out of  TARP (Troubled Asset Relief Program) funds. $50 billion, to be exact, and the government has come nowhere close to that allocation.

While the Wall Street Journal calls this $50 billion a “slush fund,” it is a good thing that further outlays from that fund need no congressional approval. If they did, it would be likely that programs like HAMP, designed to help struggling homeowners would get bogged down in congressional politics.

It is also a good thing for taxpayers already laboring under massive budget deficits run up in the last decade.

Obama Signs Student Loan Overhaul Into Law

President Obama signed student loan overhaul legislation into law today.  The new law will remove private banks from their long held role of middlemen between students and government guaranteed funds.

Instead of obtaining loans from private lenders such as Sallie Mae, students would instead get their loans directly from the Federal government. The administration says that this new legislation will save taxpayers $68 billion over the next decade.

In addition to providing direct student loans from the Federal government, under the new law,  student loan payments would be capped at 10%  of the borrower’s income and provide additional funds to community colleges.

This new legislation is a welcome change to students concerned about how they will repay their loans and college graduates struggling to do so in the current economy.

HAMP To Include Assistance To Unemployed Borrowers and Incentives for Principal Reductions

HAMP logo In a welcome move, the Obama Administration announced changes to its Making Home Affordable loan modification program today that would provide incentives to servicers and investors to reduce principal balances and would provide assistance to unemployed borrowers.

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