Foreclosure-prevention plan failing. Geithner blamed. Kucinich proposes reducing mortgage principals

[angelicwoman]

The Huffington Post reports that

"Only about a third of the homeowners who have successfully completed the trial period of the Obama administration's mortgage modification program have been offered permanent relief, according to new federal data obtained by the Huffington Post.

The conversion rate -- about 33 percent -- is woefully short of what the Treasury Department had forecast. Treasury thought the rate would be "ranging up to 75 percent," Herbert M. Allison Jr., assistant secretary for financial stability, told the Congressional Oversight Panel in October."

...

Rep. Dennis Kucinich, chairman of House Oversight's Domestic Policy subcommittee, said in an interview that Treasury isn't devoting as much attention to homeowners as it does to Wall Street.

"Treasury has been very slow to use the authority provided by Congress... to help keep homeowners in their homes," the Ohio Democrat told HuffPost. "And this contrasts with the emergency with which both administrations have worked to bail out the large financial institutions."

Kucinich said there's only one solution left.

"I've come to the reluctant conclusion that the only way to accelerate the program and also provide adequate incentives for homeowners who sacrifice to stay in their own homes is through permanent, locally-tailored, unconditional reductions in mortgage principal," he said.

http://www.huffingtonpost.com/2010/03/09/obama-foreclosure-prevent_n_492376.html

[midnight]

1. Treasury needs to start serving the working people as quickly as they do the bankers..

[Oregone]

2. Get him up against the wall!

[flvegan]

3. Never thought I'd say this...Kucinich is wrong on this one.

A reduction in principal, in some states, would be a novation on that mortgage. It would ruin the priority of that mortgage as to the title of that property. I suppose a Nunc Pro Tunc filing might help with intent, but overall...bad move. One could make it a back-end balloon, to salvage expected gains for when the market returns, but still.

I'd say, mandatory mediation in any foreclosure filing. Force non-judicial foreclosures into court (yeah, dreaming big here) and treat mediation like a bankruptcy. Demand interest rates into the low single digits. Let people pay their debts back at a lower profit rate to the lender. Lender will still make money, loan performs, everyone happy. By forcing it into court, the judge gets to decide if the lender has done all they can to make the loan work.

And in my state (Florida) the judges tend to dislike the lenders these days.

[Go2Peace]

4. Hey, you get my vote!

Wouldn't it be wonderful if we could get a program like that in place!