Courtesy of Claudette Millette
I will join the dissenters on this one. This would be a bad thing for America. I see this as a process that could blow up in many Honest Americans faces. We have enough government in the middle of 'free enterprise'. As someone above mentioned - Barney Frank is one of the key authors that got us in this mess in the first place. Should this pass, WE will be on the hook for billions more that we simply cannot afford.
Look at the billions already handed out that we will never see a dime back on to the various financial institutions (to include Freddie and Fannie) and the auto industry. Enough is simply enough.
When does it end? Do we retro this? Do we give Honest Folks who lost everything their homes and their 401K's back? Who is the judge and jury on who is Honest and who is not? Acorn? (Sorry, couldn't help myself on that one).
Seriously, we need to step back and let our economy fix itself. The dollar is currently a joke on the global market - it will only get worse if we don't start holding people accountable and that includes the corrupt politicians and corporate executives.
Four senators are putting their muscle behind a new housing bill intended to prohibit lenders operating in the U.S. from foreclosing on home owners without first having discussed reasonable modification options with the borrowers.
The bill, called the Preserving Homes and Communities Act is being sponsored by Rhode Island Senator Jack Reed, Illinois Senator Dick Durbin, Jeff Merkley of Oregon and Sheldon Whitehouse of Rhode Island.
Under this bill, lenders will be forced to the negotiating table under the threat of stiff fines and other legal penalties.
All lenders will be required to perform what the bill terms as a "net present value" test for all seriously delinquent borrowers. The test would be a financial analysis weighing the benefits of a modification of loan terms against the benefits of foreclosure.
For borrowers who do not fit into this program, the bill would create a multi-billion national fund for states to make loans or grants in order to prevent foreclosures.
The senators' rationale behind the creation of this bill is that they are frustrated with the slow pace of current loan modification programs and feel that they are not keeping up with the record numbers of foreclosures this year.
"Voluntary efforts to keep families in their homes have failed," said Durbin. "This bill will force lenders to modify qualified mortgages rather than letting them move quickly to foreclosure, which destroys households and neighborhoods."
The act will also set up a mortgage payment assistance program to provide money to state housing agencies to assist people who have lost income and face the prospect of foreclosure.
The most significant aspect of this bill would be to create "mandatory mediation" requirements forcing lenders to allow some mediation efforts between them and their borrowers before being able to file foreclosures against home owners.
This proposal will, no doubt, be met with opposition by banking and mortgage lending groups. It is, however, currently favored to be supported in the House.
Copyright 2009 - Claudette Millette, President, TheBuyersCounsel - 800-392-1446 - E-mail
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