As the Treasury Department did with the largest banks, they are now calling in the 25 largest mortgage lenders for a sit down. And they will be made an offer they can not refuse.

The government has amazing power right now over commerce. And they are using it for good or for bad. This meeting with the mortgage companies is yet to be decided, but the meeting will be to tell them to speed up loan modifications.

And odds are it is going to be ugly.

The subject of the meeting is going to be loan modifications. Specifically, the government is going to be asking — in none-too-friendly fashion — why the nation’s big servicers aren’t doing more to modify loans for homeowners who are in danger of defaulting on their mortgages. Back in the spring, after all, they all signed onto the administration’s new Making Home Affordable program, which uses a series of incentives — not the least of which is $1,000 to the servicers for every mortgage they modify — to help keep people in their homes and prevent foreclosures.

And yet, five months later — and two years into the housing bust — the rising tide of foreclosures remains the single biggest threat to economic recovery. In 2005, at the height of the bubble, there were some 800,000 foreclosures. This year, sadly, we are on pace to see 3.5 million foreclosures, with no end in sight. “On Main Street, the recovery will begin when foreclosures stop,” said Senator Jack Reed of Rhode Island, who has been pushing the Treasury Department to get mortgage relief more quickly to homeowners at risk of foreclosure. NYTimes.com.

Related posts:

1. Poor Treasury Sales May Indicate Mortgage Rates Going Up
2. Federal Reserve Initiates 9.9 Billion Dollar Loan Modification Plan
3. Federal Government Mortgage Bailout Off To Slow Start
4. Can’t Get a Mortgage Workout, Call Mortgage Insurance Company
5. Lenders Buried Under Load of Mortgage Re-Works