"I must confess to being surprised at the report by Shahien Nasiripour of Huffington Post, namely that the Administration is pushing for an even more aggressive-looking mortgage modification program than has been rumored. The reason I’m surprised is that this effort, even though it appears misguided on several fronts and falls far short of what is needed, represents an upping of the demands being made against banks. That is contrary to both the Obama Administration’s past behavior of making great sounding promises and walk them so far back as to wind up in a different country, and of inconveniencing the banks terribly much. But Shahien is an able reporter, so I’m sure he has the facts right.

The scorecard thus far appeared to be that the state attorneys general were the only group moving forward against the foreclosure fraud, but the bold promises of criminal prosecutions were quickly recanted. Instead, a 27 page outline of their settlement demands was leaked. As we discussed, it was a disappointment. Virtually all of it merely insisted that banks obey existing law. It has only two new requirements. One was ending dual track (if a bank is entering into a modification discussion or program with a borrower, it cannot keep moving forward in parallel with a foreclosure). The other was “single point of contact,” meaning having one person at the bank serve as case manager and be the interface with the borrower. We deemed that to be operationally unworkable even if the banks had their records and systems working well. And if they got those in order, borrowers would not need a designated person to make sure a modification request was handled properly.

There was also a rumor, which was connected to the AG negotiations, that the banks would be asked to make mortgage modifications at their own expense, and the number $20 billion was bandied about. The AGs and the Federal regulators seemed to be collaborating closely, which we also objected to; the state and Federal issues are very different. The idea that the banks would be pressured to make mods has gotten a huge amount of pushback in the media and from Republican legislators; there appears to be a full bore PR salvo underway.

Now notice all these ideas are being evaluated in a vacuum. We don’t know what liability the banks would be released from (the legal term is what form of release they would receive). Nor do we or the regulators have an even remotely adequate understanding of all the bad stuff the banks did. The media and anti-foreclosure attorneys have reported on various abuses, most importantly, servicer driven foreclosures, in which the borrower has either made all his payments, or perhaps been late on one or two, and impermissible application of payment, fee pyramiding and junk fees quickly drive a minor arrearage that most borrowers could correct into a foreclosure."


Read the whole thing, it is very interesting in regards to the role the WH feels it has regarding the banks and use of the rule of law to keep them in line. It also outlines the utter incapability of actual effectiveness that such often proudly trumpeted programs have that are initiated by the policy-makers therein. It's a defining characteristic of too little too late. And, gee-- you mind not bringing up such unpleasantness? It's breaking my concentration on looking forward and winning the future and stuff.

Here's the link;

https://mail.google.com/mail/?hl=en&zx=bu2...