U.S. to Pressure Mortgage Firms for Loan Relief

[cal04]

Source: New York Times

The Obama administration on Monday plans to announce a campaign to pressure mortgage companies to reduce payments for many more troubled homeowners, as evidence mounts that a $75 billion taxpayer-financed effort aimed at stemming foreclosures is foundering.

“The banks are not doing a good enough job,” Michael S. Barr, Treasury’s assistant secretary for financial institutions, said in an interview Friday. “Some of the firms ought to be embarrassed, and they will be.”

(snip)

Mr. Barr said the government would try to use shame as a corrective, publicly naming those institutions that move too slowly to permanently lower mortgage payments. The Treasury Department also will wait until reductions are permanent before paying cash incentives that it promised to mortgage companies that lower loan payments.

“They’re not getting a penny from the federal government until they move forward,” Mr. Barr said.

Read more: http://www.nytimes.com/2009/11/29/business/economy/29modify.html?hp

[vi5]

1. Yes, why actually enact legislation....

..and force democrats to take principled stands in favor of the american people, when you can just ask the crooked companies and corporations really, really nicely and try and make them feel really guilty about being mean.

I mean it worked with Scrooge in A Christmas Carol, right?

[Better Today]

7. +1

[corpseratemedia]

12. +2

[DebbieCDC]

2. Oh by all means "shame" the banks

That'll be SO effective.

Is this the best the Obama Administration can come up with?

[Betty]

3. this is bullshit

I have three times now asked Bank of America to lower my interest rate and never gotten anywhere with them. In fact, this last time, I never even got the courtesy of an answer one way or the other. And how many billions have they been showered with?

Why not make it MANDATORY if they take bailout money, they can't charge excessive interest ( I pay 7%..not asking for special treatment, I'd just like to pay in the 5"s like everyone else).

[BREMPRO]

6. you have to be kidding- you think 7% is excessive for a mortgage?

Unless you have perfect credit that is not unreasonable. If you do have excellent credit you should be able to refinance. The people who are REALLY in trouble are looking at balloon interests rates in double digits- the loans peddled by unscrupulous brokers and banks. I'll save my outrage for the actual usury loans.

[gmpierce]

10. Wrong !!

In today's market where the effective interest on treasury bills is 0% (and on a few days less than 0%) a reasonable interest rate would be or 5 percent.

The "Making Homes Affordable" guidelines reduce interest rates to as low as 2% with a gradual increase of about 1% per year. And by the way, "Making Homes Affordable" is still a con-game and a non-solution.

[dkf]

22. Rates won't be this low forever, much less 30 years.

Look at the projected deficits. I'm frankly amazed the rest of the world allows us to borrow money so cheaply. But then again, the US has become China's too big to fail.

And starting low while increasing rates 1% a year is simply reinstituting the teaser rates that got people into mortgages they can't afford.

Lastly, mortgage rates are pegged to longer term bonds, not the overnight rates which are short term. The 10 year treasury is 3.21%

[PSPS]

4. Yet another misguided "solution"

The only way to make the mortgage payment "affordable" in most of these cases is to turn them into 50 or 60-year ARM's where the borrower is doomed to never have any equity in their house -- the house they should never have purchased in the first place with that no-doc liar's loan and subsequent HELOC's to buy the BMW, boat, and boob job.

All this will do is just kick the can down the road a little longer when, inevitably, these houses will be foreclosed as they should be. But I suppose the next step will be another big hue and cry for taxpayers to "gift" these houses to the liars. You usually get a chorus of this from the very people who took out their liar's loan and didn't "cash out" before getting caught.

There are already plans in place that help people refinance their mortgages at attractive rates -- if they qualify. That's the rub. When one actually has to document their income, they can't qualify for the loan. You're not going to qualify for that $750K mortgage on your $40K/year income like you could in the past with the no-doc "pick-a-pay" loan.

[gmpierce]

11. Yet another misguided commentor

Some of the people taking out liars' loans were liars, but it's funny that it's only in the last few years they were even able to lie.

Most of these supposed liars are (like most Americans) barely able to add up the checkout receipt at the grocery store.

The brokers and lenders who underwrote these loans knew what they were doing - they were underwriting loans that COULD not be paid back. They didn't care because they were immediately going to sell the loans to the next stooge in line - (like your pension fund).

In one way it's unfair to give someone a free house. It's almost, but not quite, as unfair as letting the thieves keep their ill-gotten gains.

[MisterP]

5. "US goes, hat in hand, to beg with those ruining its economy as though they were essential

massive 'enticement' program to follow, further dissolving economy"

why can't we just have a state actor to guarantee good mortgages and jobs, instead of robotically trying to work through self-devouring capitalism?

what's so goddamned holy about those with money?

[Beavker]

8. Wells Fargo actually is advertising for it's loan recipients to use the program.

We will be calling soon to find out if we can do it. We have a decent rate now, but would like to see if we can refi for cheaper. We have a 2nd loan that due to the drop in value of our house, put us underwater (ate up the equity we'd gained in the past several years).

So I hope they can help us.

I still just love how the GOPigs wanted the Free Market, Corporate America, and Wall Street to get us out of this mess. I can't fathom how bad things would be without the bailouts, stimulus and program extentions. Cheney would need to hire Blackwater to keep rioting protesters out of his yard...maybe it should happen anyway.

[doodadem]

13. We've been trying to get Wells Fargo

Both our first and second mortgages are with Wells Fargo. We've had one of the HUD rep groups trying to get them to redo them for several months now. They did the second one on a "temporary" basis where they yank the payment straight out of our checking account (also with them). We're still getting a runaround on the first. They spit it out the first time because my husband was on unemployment (this is a shock?). Then it was resubmitted with his new job (which just fizzled). We've heard nothing back on that one.

[JDPriestly]

9. It's a bit late, isn't it?

[Joanne98]

14. Washington to press banks on mortgage relief: report

Source: Reuters

NEW YORK (Reuters) - The Obama administration plans to announce on Monday a campaign to press mortgage companies to reduce payments for many more struggling homeowners, The New York Times reported in Sunday editions.
"The banks are not doing a good enough job," the Times quoted the Treasury Department's assistant secretary for financial institutions as saying in a Friday interview.

"Some of the firms ought to be embarrassed, and they will be," Michael Barr told the newspaper.

While lenders in recent months have stepped up the pace of mortgage payment cuts for financially troubled borrowers, the Times reported there was increasing evidence that the $75 billion taxpayer-funded effort to fight foreclosures was heading for trouble.

Most of the loans modified under the program remain in a trial stage, and only a small percentage have become permanent.

According to the report, Capitol Hill aides in close contact with senior Treasury officials say a consensus has emerged at the department that the program has proved inadequate.

Barr told the newspaper that Washington would try to shame the lenders by publicly naming institutions that fail to move quickly enough to lower mortgage payments permanently. The Treasury Department also will not pay the lenders promised cash incentives until the payment cuts become permanent, he added.


Read more: http://www.reuters.com/article/newsOne/idUSTRE5AS00R20091129

[bluestateguy]

15. This is all fine and good

Ask nicely at first, but if nothing comes of it, the next time they should not ask, but tell.

[sojourner]

16. oh oh......there are some who will be VERY unhappy about this!

but not me! about time someone put some pressure on the bastards.

[TacticalPeek]

17. Dup

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=4163181&mesg_id=4163181

[truedelphi]

18. How has "Change we can believe in"

become, "We will not demand the Powers that Be treat American consumers fairly, but we will possibly URGE them to."

[Bluebear]

19. I don't need my bank "embarrassed". I need concrete action to save my house.

Where is my bailout?

[pundaint]

20. That nice.

[cowcommander]

21. K&R

Doubt anything will come out of it though, but one must always hold onto hope...

[Igel]

23. Odd article.

The first and only real assumption is that given all the criteria that borrowers have to meet, the only conceivable reason for a borrower to not have his/her loan refinanced is bank unwillingness and incompetence. Even as unemployment rises. Unemployment that may be most strongly correlated with the very groups that have loans most subject to refinancing. Even as the houses are worth less.

So many possible reasons, with all of them most likely contributing to the crappy performance of the program. But it all boils down to a virtuous program and evil bankers.

Before assigning 100% of the blame to a single group I'd actually like for the NYT to provide information that would justify assigning blame, instead of just assumption and innuendo.