Could This Foreclosure Solution Actually Work?
Less than 24 hours after passing the new foreclosure legislation, The American Housing Rescue and Foreclosure Prevention Act, New York Congressman Barney Frank urged lenders to halt foreclosures until their new bill takes effect…
IN OCTOBER!!!
I remember speaking with a retired FNMA official a few months ago. He’s been active in trying to bring some sense to this process. I asked him, “What’s it like trying to work with people who know absolutely nothing about the subject matter?”
His reply: “Unbelievable… embarrassing, really.”
Speaking on Mr. Frank’s suggestion, Maxine Waters added: “As one who has focused on mortgage servicing from the outset of this crisis, I strongly support the Chairman’s call for forbearance until October 1st.”
For someone who’s “focused” on this from the outset, she sure hasn’t learned much.
First of all, nobody has a clue how this bill’s going to play out.
When Hurricane Katrina hit, FEMA was expected to have some kind of plan to deal with the situation- it was their raison d’etre.
We know how well they responded.
We allegedly have the finest military in the world, yet it’s a little early to be raising a “Mission Accomplished” banner in Iraq… or Afghanistan.
Asking lenders to “sit tight” for a few months to see about a scheme that’s been foisted on an already-overburdened FHA (they might actually need financial assistance themselves this year), when our government can’t handle the tasks it’s supposed to have under control is downright idiotic.
Even worse than this bill not delivering on its promises, it gives false hope to homeowners, most of whom will NOT qualify to take advantage of this plan. This will distract time, energy and resources from solutions that offer a much higher probability of success.
Just like HOPE NOW, FHA Secure, and Project Lifeline, the latest governmental solution will fail to live up to expectations.
It’s clear to me that many homeowners are falling through the cracks and this bill, with its attendant hoopla, will likely increase their number.
There are a number of other “issues” with the implementation of this foreclosure assistance bill, which I’ll get to in my next post….
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August 2nd, 2008 at 7:13 am
[...] the bill was even signed by the President, legislators were urging lenders to stop foreclosure proceedings on any loans that “might qualify.” Nevermind that there was no indication [...]