Treasury Department Calls Meeting With 25 Largest Mortgage Lenders
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.
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Comment by Corey K on 13 July 2009:
You know, the Treasury Dept. and Alan Greenspan held a similar meeting before the last housing bubble began.
This cannot be good.
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Comment by Maggie Knowles on 13 July 2009:
Mortgage modifications will not work until they include reducing principle to market value, then reducing interest rate. As long as folks are still employed, this should do the trick. Let the banks and investors take the loss, as it should be, since they took the risk.
Comment by M Realty on 13 July 2009:
Its really sad that the government has to force every change that happens with the lenders and banks. Why cant they just take some initiative and prevent problems like this in the first place? I really feel that there was ample warning and none of this should have been a surprise.
-Tyler
Comment by Austin Apartment Pro on 15 July 2009:
How do you get foreclosures to slow down when houses in some markets are worth 20-40% less than their loan value and the homeowners are continuing to lose their jobs?