A Home Loan Named Desire
source: http://3blmedia.com/theCSRfeed/Home-Loan-Named-Desire#
GoodB Blog
It’s official. The “save the drowning homeowner who got burned plan” aka the “Home Affordable Modification Program (HAMP)” is a Big Fat Dud.
A U.S. Congressional oversight panel reported this week that of 500,000 mortgages currently in the hopper for restructuring, only 2,000 (less than half a percent) have been permanently modified-a remarkable feat of failure only George W would envy.
The ten month old program offers lenders $1000 per year for up to three years if they modify a loan. Mortgage servicers make far more than that in late fees alone. The banks with these loans on their books must be laughing at the paltry sum in the wake of the tens of thousands of dollars they stand to make in foreclosure. Investor pools that hold mortgage securities and hide behind the servicers and banks would lose millions. In response, they slither away out of the public eye and simply ignore the Obama administration’s call to make homes “affordable.”
There is no legally binding, real financial incentive, or even official threat to participate, so why bother say lenders? Hence the U.S. “Making Home Affordable” plan is a miserable failure. It is all bark and no bite.
Why bother indeed? Lenders might step up because they want to help their fellow countrymen? Let’s just forget that. How about doing it for the sake of the housing market, the economy, the country? No thanks, lenders say.
We would have to come up with something more compelling than that to shake the snakes out from under the rocks. Perhaps some big buckeroos might do it. Short of that, real threats of withholding government aid from lending institutions might create sudden patriotic fervor. Or perhaps bank-loving policy makers should put their money where their mouth is-in the American people’s hands.
While the nation is spending billions on two wars it doesn’t want and trillions on the same folks that pulled the financial ground out from under them, $3000 to modify a mortgage seems like chump change to a lender. And folks as we know from the biggest scam ever to hit the American people-subprime mortgages and the CDO and CDS securities that hid them- banks are not chumps.
source: http://3blmedia.com/theCSRfeed/Home-Loan-Named-Desire#
It’s official. The “save the drowning homeowner who got burned plan” aka the “Home Affordable Modification Program (HAMP)” is a Big Fat Dud.
A U.S. Congressional oversight panel reported this week that of 500,000 mortgages currently in the hopper for restructuring, only 2,000 (less than half a percent) have been permanently modified-a remarkable feat of failure only George W would envy.
The ten month old program offers lenders $1000 per year for up to three years if they modify a loan. Mortgage servicers make far more than that in late fees alone. The banks with these loans on their books must be laughing at the paltry sum in the wake of the tens of thousands of dollars they stand to make in foreclosure. Investor pools that hold mortgage securities and hide behind the servicers and banks would lose millions. In response, they slither away out of the public eye and simply ignore the Obama administration’s call to make homes “affordable.”
There is no legally binding, real financial incentive, or even official threat to participate, so why bother say lenders? Hence the U.S. “Making Home Affordable” plan is a miserable failure. It is all bark and no bite.
Why bother indeed? Lenders might step up because they want to help their fellow countrymen? Let’s just forget that. How about doing it for the sake of the housing market, the economy, the country? No thanks, lenders say.
We would have to come up with something more compelling than that to shake the snakes out from under the rocks. Perhaps some big buckeroos might do it. Short of that, real threats of withholding government aid from lending institutions might create sudden patriotic fervor. Or perhaps bank-loving policy makers should put their money where their mouth is-in the American people’s hands.
While the nation is spending billions on two wars it doesn’t want and trillions on the same folks that pulled the financial ground out from under them, $3000 to modify a mortgage seems like chump change to a lender. And folks as we know from the biggest scam ever to hit the American people-subprime mortgages and the CDO and CDS securities that hid them- banks are not chumps.
source: http://3blmedia.com/theCSRfeed/Home-Loan-Named-Desire#
