Posted on 02/27/2010 6:29:46 AM PST by TigerLikesRooster
Obama Considers Foreclosure Ban
02/26/2010
By: Carrie Bay
President Obama and his administration are floating an idea to prohibit lenders from foreclosing on a home unless the borrower has been considered for the government’s Home Affordable Modification Program (HAMP).
The proposal would require servicers to initiate contact with all borrowers who are 60 or more days behind on their mortgage payments and offer them access to the federal modification program. Only after the homeowner has been screened under the HAMP guidelines and it is determined that the loan cannot be saved, could foreclosure proceedings commence. The proposal would also halt any foreclosures already in process once a borrower has been accepted into the trial phase of the program.
The proposal was reviewed by lenders last week on a White House conference call and “prohibits referral to foreclosure until borrower is evaluated and found ineligible for HAMP or reasonable contact efforts have failed,” Bloomberg News reported, citing a Treasury Department document outlining the plan.
(Excerpt) Read more at dsnews.com ...
P!
And how would he do this? By executive order? I don’t recall us electing a King.
Nothing like ex post facto screwing with contract law to make capitalists hunker down. That’ll be great for economic recovery.
That sounds like something a Socialist Genius would ponder on.
FGS!
What incentive is there to pay one’s mortgage?
Wow...he’s really out of control. Maybe he can bark orders to the bail-out-banks that still owe money to big government...but not across the board.
I’m thinking that one of the biggest mistakes of my life so far was not walking into a bank, declaring that I have no job, no income, no social security number, and wanting to buy a house.
I don't understand how this could not be a "taking" of the money loaned. You're basically being told that the provisions you made for collecting the loan in the event of default are unenforceable. Not only did you just get screwed this time, you have been 'splained by the Chicago Government that you should never make a home loan again. |
Why stop there. He should just set up a phone based Government aid system where if you are unable to make your mortgage payment you call the Government and after a short interview the Government sends the mortgage company the payment and just adds it to the home owner’s share of the national debt!
What could be simpler.
Aside from its obvious interference with contracts, this program would have far-reaching side effects. The obvious moral hazard would increase the number of strategic defaults. The passage of distressed homes into financially stronger hands would be slowed, so the market overhang of homes would increase. More significantly, the value of many mortgages would be decreased. Who will take the hit? Ultimately, the taxpayer, since the banks can’t, and many of these mortgages are backed by Fannie and Freddie, who now have an unlimited credit draw on the Treasury.
CORRECTO you are, messing with the laws of supply and demand could set us all way back. While he is at it, he might try to change the LAW and stop the element of water from freezing at 32 degrees. He could even pass a law in Congress that water can’t freeze unless it gets down to 22 degrees, and saw the Oranges of California and Florida.
Sounds great to some I suppose, except that there’s a backload of millions whose foreclosures have been delayed significantly beyond 60 days, in many cases a year or more, already. Not to mention how many that have already applied for HAMP or some other program and either failed to qualify or never returned the paperwork, or defaulted again in spite of having their interest rate and principal adjusted. Some of these homes are probably not even occupied, as many of the defaults are on “investment’ homes that the buyers hoped to flip.
The bottom line is that we’re talking about virtual squatters who defaulted on their mortgage a long time ago and who have had foreclosure delayed for too long already. Foreclosure is the exact correct process to resolve this problem and banning foreclosure does nothing but put off yet again the only effective cure.
If anything, we need a way to accelerate the foreclosure process, get these nasty loans off of the books so we can start rebuilding our economy. Until that happens, and as long as idiotic legislation like this is all that is proposed, nothing can or will get any better.
How's that Hope and Change is working for them?...
I didn’t think lenders were required to participate in HAMP, because it did cost them money to do so.
If HAMP was just government helping out the person, I’d understand the government wanting to make sure the person knew they had access to the program (I wouldn’t like the program anyway).
Of course, all the lenders really needed was the right to modify the loans without losing the right to foreclose. Other than that, let the lenders decide if it makes fiscal sense to rework the mortgages.
Wow! I’m like wow! America has gone full Zambabwe.
Exactly what legal or constitutional authority has Dear Reader cited that gives him the power to order these policies?
You guys need to read past the headline. Foreclosures would only be banned if the person who owned the house is not screen, in case that person qualify for the federal assistance program. Kneejerk reactions are bad.
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