Home : Blogs : John Wall : TeamResults

Relief for borrowers in default.

There may be some relief coming for homeowner's who face foreclosure action by their lender. Washington Mutual, Bank of America, Citigroup, Merrill Lynch, and Wells Fargo, received letters asking for a six month moratorium on Foreclosures and instead urging these major lenders in the California market to focus on finding ways to keep borrowers from loosing their homes.

Many thousands of borrowers in California are at risk of default because they took on risky loans, and could loose their homes. Consumer groups, legal aid groups, housing services, at least place some blame on the lenders themselves because of loose underwriting which pushed some borrowers into loans they couldn't afford.

The Los Angeles Times quoted the associate director of California Reinvestment Coalition as saying "We are asking the largest lenders in the state to take leadership so that families can keep their homes and California's economy won't suffer".

Posted by John Wall on 05/15/2007 03:38 PM

Comments (4)

This post has been included in California Information

4 Comments on Relief for borrowers in default.

MAY

2007

I think it's a great idea, but what makes the California Reinvestment Coalition think that big banks want to help the economy? Isn't making money better for them? I don't know, it just seems very optimistic, which is good, but optimistic nonetheless.

True. But, banks are facing a public relations nightmare with this stuff and it just might be that they're willing to give a little in order to improve their image. I think it will be interesting to watch this story and see how it unfolds. Rember also, that the 'coalition' isn't asking for foreclosures to stop forever, just that for the next six months they be suspended in order to make stronger efforts at saving properties.

The other thing that occured to me is that many foreclosures aren't selling and from what I hear, banks are Not fond of REOs.

In the end, it will come down to the borrowers ability to refinance or sell the property prior to foreclosure. I wouldn't be surprised to see an increase in mortgage fraud investigations also. My guess would be that the applications for these less-than-ideal loans are riddled with lies.

MAY

2007

Obviously it's a bailout for banks, not homeowners. Just like the savings and loan crisis years ago. Alan Greenspan to the rescue all over again.

Doc: I'm interested to know how this could be considered a bailout for banks. Alan Greenspan is retired, and moving to the private sector & don't think he would mastermind a solution like this.

Leave a response…

Name:

Email:
(optional)

Comment:

What does the graphic say?