Obama's housing fix: help banks modify loans — or allow judges to

[babylonsister]

Obama's housing fix: help banks modify loans — or allow judges to

By Kevin G. Hall | McClatchy Newspapers


WASHINGTON — President Barack Obama is expected Wednesday to take a carrot-and-stick approach with banks and other lenders when he unveils his new plan to stop the soaring nationwide home-foreclosure rate.

He's expected to announce in Phoenix a plan to use at least $50 billion in Wall Street rescue money authorized last year to provide subsidies when banks reduce interest rates for troubled homeowners to lower the monthly payments many Americans are now struggling to pay.

That subsidy plan, details of which have yet to be formally announced, would serve as the carrot for banks to help homeowners stay in their homes and halt foreclosures, which not only result in losses for individuals and the banks, but also drag down the values of nearby homes.

Banks have joined two prior voluntary efforts during the Bush administration — Hope for Homeowners and the Federal Housing Administration's FHA Secure — but these efforts have resulted in relatively few mortgage modifications.

Now they'll have a stick waved at them if they don't comply with the subsidy plan. It'll come in the form of Obama's support for legislation pending in Congress that would allow bankruptcy court judges to modify the terms of a mortgage.

more...

http://www.mcclatchydc.com/227/story/62372.html

[Romulox]

1. Anything other than DIRECT HELP to homeowners is more "trickle down" economics

We've already given the banks hundreds of billions of dollars to "voluntarily" modify house notes--they have refused.

So let's give them more money and ask very nicely this time? Where is the TARP mortgage modification oversight board, Mr. President? :wtf:

"Now they'll have a stick waved at them if they don't comply with the subsidy plan. It'll come in the form of Obama's support for legislation pending in Congress that would allow bankruptcy court judges to modify the terms of a mortgage."

This should be done regardless--you don't used people's destroyed lives as bartering chips!