Bloomberg: WH may BAN Foreclosures Without HAMP Review via Exec. Order

[FourScore]

Obama May Prohibit Home-Loan Foreclosures Without HAMP Review
By Dawn Kopecki

Feb. 25 (Bloomberg) -- The Obama administration may expand efforts to ease the housing crisis by banning all foreclosures on home loans unless they have been screened and rejected by the government’s Home Affordable Modification Program.

The proposal, reviewed by lenders last week on a White House conference call, “prohibits referral to foreclosure until borrower is evaluated and found ineligible for HAMP or reasonable contact efforts have failed,” according to a Treasury Department document outlining the plan.

“It is one of the many ideas under consideration in the administration’s ongoing housing stabilization efforts,” Treasury spokeswoman Meg Reilly said in an e-mail. “This proposal has not been approved and there are no immediate planned announcements on the issue.”

She confirmed the authenticity of the document, which hasn’t been made public.

At present, lenders can initiate foreclosure proceedings on any loan that hasn’t been submitted for HAMP eligibility. Under current HAMP rules, foreclosure litigation can proceed while borrowers are under review for the program or even in a trial modification.

The proposed changes would prohibit lenders from initiating new foreclosure actions before loan screening by HAMP and would require lenders to halt existing proceedings for borrowers once they are in a trial repayment plan...

http://www.bloomberg.com/apps/news?pid=20601087&sid=ahuuwBS8KYq8

[MannyGoldstein]

1. $10 Says This Doesn't Happen

Obama's just not made of that kind of stuff.

[trumad]

2. They still don't get it...

HAMP is a complete failure.

Only 166,000 folks have worked a deal through HAMP... and many are already defaulting on the deal.

Why--- because folks are turned upside down in their homes and will never get right side up unless principal is forgiven.

[peggygirl]

3. Or, unless ARMS are reversed. nt

[FourScore]

4. That's really whats wrong here.

[w4rma]

6. And they will never 'get it' with Goldman Sachs running the economic policy wing of the White House.

And Rahm in charge of who gets hired and fired.

[druidity33]

5. K&R for visibility... nt.

[ProgressiveProfessor]

7. I am interested to see how this could be legally enforceable, especially on state chartered banks

or other financial institutions. Even harder on private mortgages. Its starting to look like rule by decree.

[Igel]

8. That bothers me.

Perhaps in the law's entrails there's some provision concerning soliciting applications--HAMP covers everybody in category X, but the assumption is that they'd willingly and voluntarily apply. But if they don't apply, it's possible to force the lender to solicit an application and if due diligence isn't followed then the foreclosure can't go through--with some government official's delegated aide responsible for approving whether 5 million or so application were duly sought.

Perhaps once an application is received somebody needs to sign off on it before the foreclosure is authorized.

Otherwise--and even then--it strikes me as perilously close to a taking without due process or compensation.

[TwilightGardener]

9. Some people have been foreclosed on even when they thought

they had reached a deal with the lender under HAMP, as I recall. I don't think this is government overreach, it's just an additional hoop for lenders to jump through, in order to protect homeowners from having the rug pulled out from under them even when they complied with the HAMP procedures.