Posts Tagged ‘treasury’

Thank You, Captain Obvious!

Ok, so I haven’t been updating here much lately, but I am back, and I came across this post at Crooks and Liars today about the testimony at yet ANOTHER foreclosure crisis hearing in the House. Yet another financial expert is telling our Congressmen that the Treasury is all about protecting the banks and not the American people.

Umm..let’s see. The foreclosure crisis started in late 2007 and rapidly picked up steam when it finally took a tumble off a cliff in the fall of 2008. There have been  plenty of congressional and senatorial hearings during this time, with our representatives and senators wringing their hands about what can be done to fix the mess. Since then, millions of families have been foreclosed on, most of them, I might add, wrongfully, given the fact that we now know the extent of the mortgage fraud on the parts of servicers, Wall Street, and the brokers that sold these crappy, crappy loans to the American people.

Since then, what do we have to show for it? Bush tried Hope For Homeowners, and that didn’t work because no one who was in trouble could qualify. Then Obama comes along and he tries HAMP. Although HAMP has done better than Hope for Homeowners, it must still be classified as a complete failure because it is at best a band aid over the gaping wound that is the U.S. housing market. Millions of families have lost their homes since the advent of the crisis and millions more will lose their homes before its over.

So, why has nothing changed? Why can’t the government keep our great nation from bleeding out? As Adam Levitin put it “The federal regulators don’t want to get info from the servicers, because then they’d have to do something about it.” and “The prime directive coming out of the Treasury is ‘protect the banks and don’t force them to recognize their losses.”

As I have said many times, the only way to fix the foreclosure mess, which by the way, is one of the major impediments to a full and thriving economic recovery, is to tell the banks they’ve got to take their lumps, and modify every single distressed loan in the nation. Sure, this will cause  some banks will fail, but other, more stable banks will rise up to take their place. That’s capitalism. The bankers were the ones to take enormous risks with our money and the financial stability of the entire nation and they should be made to pay for their folly. The American people have already paid in blood, sweat and tears for what was largely not their fault.

New Class Action Suits Could Create Precedent To Enforce HAMP Modification Agreements

gavel1

 

By most measures, the Making Home Affordable Modification Program has had lackluster results in permanently averting foreclosures and dampening the effects of the foreclosure crisis. The main reason HAMP has been so ineffective is the fact that at its core, it remains a voluntary program on the part of mortgage loan servicers and lenders. In other words, HAMP has no teeth.  Servicers may choose to participate or not and even if they choose to participate,  nothing in the program language states that they must modify any loans.

Therefore, we have a situation where homeowners enter into trial modification agreements and comply with each and every condition of the agreement, only to have the servicer delay responding or continue to ask for more documents. All the while, the homeowner continues to make his or her trial payments. Worse, it is all too common for the borrower’s home to be foreclosed upon while the trial modification is pending, even though HAMP prohibits any foreclosure sale while the borrower is in a trial period plan.

Four class action suits, filed  by the Boston based non-profit  National Consumer Law Center, in the state of Massachusetts aim to give HAMP teeth it lacks. The lawsuits  claim that the trial plan is a contract that the servicers have breached by failing to modify the loan once all conditions have been met. The complaints go even further by suggesting that the signed agreement the servicers have with the U.S. Treasury represents a contract to mitigate the foreclosure crisis by offering assistance to homeowners at risk, and that by failing to modify enough loans, the servicers have breached that contract as well.

Should a judge rule in favor of the plaintiffs in these cases, a precedent will be established that renders both the trial plan and the agreement to join the HAMP program enforceable contracts.  This would mean that servicers would be required to give permanent modifications to those homeowners who comply with the terms of the trial plan, and furthermore,  be required to actually render assistance and prevent foreclosures per the HAMP agreement.

HAMP Loan Modification Program Results Continue To Be Underwhelming

foreclo

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.

(more…)

Treasury Lowers Expectations For HAMP Program

More than a year after launching HAMP, only 210,000 families have received permanent modifications. This puts the program’s original goal of helping 4 million families far behind schedule and highlights the program’s weaknesses.

So what does the Treasury do? Instead of doing things to improve the program, such as giving it some actual teeth to force banks to cooperate and actually modify loans, the Treasury now says that when it made the original  projection of helping 4 million homeowners, it only meant that up to 4 million homeowners would be “offered” a modification, not that they’d actually receive  one.

The Treasury has revised its projections and claims that HAMP will help 1.5 to 2 million homeowners. It is now pushing the idea of other foreclosure abatement solutions such as short sales where the beleaguered homeowner sells his home for less than the value on the note and finds “more suitable” housing.

It seems the Treasury is adopting the stance of one banker who actually said that his bank only offers modifications. They don’t actually do them. Do we need any further evidence that Treasury Secretary Geithner is  in the pocket of the big banks? Of course, it is not him alone, it is  his entire department. Who, there, is actually looking out for the well-being of the American people who have long been bamboozled by Wall Street and Big Finance?

Buy VerizonCell Phones and Save. | Thanks to Bank Rates & Reviews, CD Rates and UK Loan
Easy AdSense by Unreal