Obama Administration Pushing For Banks To Modify Millions Of Mortgages To Settle Foreclosure Claims

[flpoljunkie]

Shahien Nasiripour

Obama Administration Pushing For Banks To Modify Millions Of Mortgages To Settle Foreclosure Claims

03/16/11 01:08 AM Updated: 03/16/11 01:08 AM

NEW YORK -- The Obama administration is seeking to force the nation's five largest mortgage firms to reduce monthly payments for as many as three million distressed homeowners in as little as six months as part of an agreement to settle accusations of improper foreclosures and violations of consumer protection laws, six people familiar with the matter said.

Described as a "shock and awe" approach, the deal would accomplish the four goals set out by state and federal policy makers and regulators as part of their multi-agency investigations into abusive mortgage practices by the nation's largest financial firms: punish banks for violations of state law and federal regulations; provide much-needed assistance to distressed borrowers; stabilize a deteriorating housing market; and dissuade firms from abusing homeowners in the future.

The modified mortgages could cost the five financial behemoths -- Bank of America, JPMorgan Chase, Citigroup, Wells Fargo and Ally Financial -- as much as $30 billion, according to sources. Combined, the five firms handle three out of every five home loans, according to newsletter and data provider Inside Mortgage Finance.

It also could lead to reduced mortgage payments or lowered loan balances for nearly two-thirds of the 4.7 million delinquent homeowners who have yet to fall into foreclosure, according to data provider Lender Processing Services.

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[flpoljunkie]

1. Geithner Defends CFPB's Role in Talks on Deal with Mortgage Firms

Geithner defends consumer agency’s role in talks on deal with mortgage firms

By Brady Dennis, Tuesday, March 15, 8:56 PM

Treasury Secretary Timothy F. Geithner pushed back Tuesday against lawmakers questioning the new Consumer Financial Protection Bureau role in negotiating a settlement with mortgage servicing firms whose shoddy practices and flawed foreclosure paperwork came to light last fall.

Republicans on Capitol Hill have said that the CFPB should not participate in the talks because it has no permanent director and because it won’t have regulatory authority until it opens in July. Sen. Richard C. Shelby (R-Ala.) recently accused the bureau’s acting director, Harvard law professor Elizabeth Warren, of leading what “appears to be nothing less than a regulatory shakedown” of some of the nation’s biggest banks.

Geithner said during testimony on Capitol Hill that he had asked Warren to advise the federal agencies and state attorneys general collaborating on the pending settlement on how to design appropriate mortgage servicing standards.

In a statement, Warren hit back against the notion that a watchdog created to help consumers shouldn’t participate in an issue that affects potentially millions of Americans.

“Political attacks against federal and state law enforcement officials for responding to alleged legal violations are dangerous,” she said. “We know what can happen when laws aren’t fairly or consistently enforced because of political pressure, and it doesn’t end well for American families, for honest businesses, or for the economy.”

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[flpoljunkie]

2. Elizabeth Warren testifying LIVE on c-span.org. Began at 10AM. Link below.

http://www.cspan.org/Events/Elizabeth-Warren-Defends-Consumer-Financial-Protection-Bureau/10737420228-1/

New rules on the federal-state mortgage service industry will take effect this July to provide transparency for both regulators and consumers and to avoid another foreclosure crisis. Today, a house committee is hearing from top Presidential advisor Elizabeth Warren. She is discussing the implementation and Congressional oversight of the Consumer Financial Protection Bureau.

Warren, Special Advisor to the President and the Secretary of Treasury, is fielding questions on the CFPB’s plan along with foreseen problems with the program. Warren is discussing the bureaus future role of regulating credit cards and promoting fairness for home loans and reverse mortgages.

On July 21, the CFPB is set to take on the responsibilities of enforcing rules that allow consumer financial service providers and banks to compete fairly and will provide consumers with clear information on all products and services.

Republicans proposed legislation that will make the budget for the bureau contingent to congressional appropriation. The House has recently approved a bill to cut the budget for the bureau in half for this year.

[Pirate Smile]

3. Thank you, flpoljunkie. Great information.

[flpoljunkie]

4. Link to Elizabeth Warren's written testimony.

http://financialservices.house.gov/media/pdf/031611warren.pdf

[flpoljunkie]

7. Warren taking the R's to school. It's obvious R's stand with the banks against consumers.

They are trying their damndest to get her to say she is, in effect, the head of the CFPB. They had hoped to damage her. They are failing.

[flpoljunkie]

12. House Republicans Amplify Attacks on Elizabeth Warren

House Republicans Amplify Attacks On Elizabeth Warren, Consumer Protection

Zach Carter
Posted: 03/16/11 03:51 PM

WASHINGTON -- In a hearing marked by openly hostile questioning from House Republicans, consumer advocate Elizabeth Warren made her highly anticipated first appearance before Congress as a member of the Obama administration, emphasizing the need for stronger oversight of big banks and small mortgage firms.

Warren, who is currently tasked with setting up the new Bureau of Consumer Financial Protection, was subjected to two and a half hours of inquiry before a Financial Services subcommittee regarding her role at the emerging agency and the scope of its powers. In her testimony, she focused on the need for easily-understood consumer lending terms and stronger enforcement of predatory lending regulations.

"I don't care how big you are, I don't care who you your friends are, everybody follows the law," Warren said, adding later, "What this agency is about is making the prices clear, making the risks clear, making it easy to compare one product to another. The point is to get an informed consumer, because I believe that American families are good at making decisions when they have good information upfront."

Congressional Republicans attempted to portray Warren as the "unaccountable" head of a bureaucracy immune from oversight from Congress or federal agencies. Republicans are waging a two-front war on the CFPB, hoping to cut its funding and weigh down its rulemaking procedures by replacing its single director with a five-member board of directors.

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[ClassWarrior]

5. Amen. So many people are suffering from foreclosure.

NGU.

[Scuba]

6. Already? Only one million American families ....

...lost their homes to foreclosure last year.

[flpoljunkie]

8. Would you rather they do nothing? This will help a lot of people.

Read the entire article. That said, it's far from a done deal. That's the bad part.

[Scuba]

13. My point was....

...this action comes far later than it should have. Sorry if I wasn't clear.

[flpoljunkie]

14. Can't argue with you there.

[krawhitham]

9. a lot of people bought homes they could not afford

no matter how the economy did. They got interest only payments and when the big payments started they were going to flip that house, take the profit and buy a house they could afford. Personally I do not think these people should be helped, they knew the risks and lost

[TygrBright]

10. Yep. It's all their fault.

Everyone who ever gets suckered in on any kind of financial deal that ever carries any level of risk and goes wrong should be PUNISHED. They should have to ENDURE MISERY. Them and their families! NO HELP FOR THEM, dammit.

:sarcasm:

:eyes:

wearily,
Bright

[flpoljunkie]

11. People who bought houses to flip them are not eligible for help.

[Vidar]

15. Better late than never. This should have been a condition of the fucking bailout,

but Obama gave away his best bargaining chip.

[dennis4868]

16. Obama is in the pocket of big business...

NOT!