By Lingxiao Li
The Obama administration on Monday plans to announce a campaign to pressure mortgage companies to reduce payments for many more troubled homeowners, as evidence mounts that a $75 billion taxpayer-financed effort aimed at stemming foreclosures is foundering. Even as lenders have in recent months accelerated the pace at which they are reducing mortgage payments for borrowers, a vast majority of loans modified through the program remain in a trial stage lasting up to five months, and only a tiny fraction have been made permanent. Some economists argued that the plan was built for last year’s problem — exotic mortgages whose payments increased — and not for the current menace of soaring joblessness. Lawyers who defend homeowners against foreclosure maintained that mortgage companies collect lucrative fees from long-term delinquency, undercutting their incentive to lower payments to affordable levels. Mr. Barr, who supervises the program, portrayed such deliberations as part of a constant process of assessment within the Treasury. He expressed confidence that the mortgage program had sufficient tools to deliver relief, characterizing the slow pace as reflecting a lack of follow-through, and not structural defects requiring a revamping.
http://www.nytimes.com/2009/11/29/business/economy/29modify.html?hp
http://topics.nytimes.com/your-money/loans/loan-modifications/index.html?inline=nyt-classifier
http://www.nytimes.com/2009/03/05/your-money/mortgages/05housingprimer.html
The government is really stepping in and taking control. They are keeping the idea that everyone should have the American Dream. At the same time things need to run their course. This was a very interesting article.
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