New Bill Will Force Modifications and Restrict Foreclosures

[Slim Shavings]

New Bill Will Force Modifications and Restrict Foreclosures
By JACOB GAFFNEY
September 30, 2009 3:41 PM CST
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A team of Senators, who say they are fed up with the mortgage modification efforts of the nation’s largest servicers, believe it’s time to make the appropriate changes to make lenders modify certain loans and limit the foreclosure practices of those same firms.

Newly introduced legislation, titled the Preserving Homes and Communities Act of 2009, introduced by Rhode Island Senator Jack Reed (D) and cosponsored by Senators Dick Durbin (D-IL), Sheldon Whitehouse (D-RI) and Jeff Merkley (D-OR), may require some lenders to meet face-to-face with certain distressed borrowers to discuss options to foreclosure.

If successful, lenders and servicers must offer modifications to homeowners if the net present value of modification is greater than that of foreclosure. Limits on foreclosure fees will also be limited and a national database tracking foreclosures will be created. Firms that do not comply may face strict penalties that are not yet disclosed, but according to a statement on the subject, will be “meaningful.”

“It’s long past time for the Senate to step up to keep families in their homes and to help lead the way toward economic recovery,” he added.

“As foreclosure rates continue to climb, a lasting economic recovery becomes harder to reach,” said Durbin. “Until we stabilize the housing market, we simply won’t get a handle on the broader economic crisis. Voluntary efforts to keep families in their homes have failed.”

Other points of the proposed legislation will authorize state-sponsored mediation programs as well as a system for distributing grant money to borrowers who are struggling to make payments, regardless of the mortgage product they are participating in.

“More and more households are finding that even with a fixed-rate mortgage that they could afford before the recession, they are just one pink slip away from losing their biggest investment,” he adds.

“In the last year, the federal government has taken decisive action and devoted substantial financial resources to shoring up financial markets, averting a potential national and global financial meltdown,” said Reed. ”Despite federal efforts, the number of foreclosures continues to rise at an alarming rate on pace to surpass last year’s foreclosures by a third.”

Write to Jacob Gaffney.

New Bill Will Force Modifications and Restrict Foreclosures : HousingWire || financial news for the mortgage market

[Moe Bedard]

I have seen so many bills and promises Slim. What have they done? More political propaganda...

[davephx]

"Preserving Homes and Communities Act of 2009"

Great Bill to address our issues but will it be false hope?
Important details of its HOPE for us. Trying to find reporting that is more than just the press release all the media is reporting.

So far no bill number or exact copy but the details are useless if it doesn't get a committee hearing. One site supposedly has it but you have to subscribe for $510/yr at Congressnow.com

It was introduced by Senators Durbin, Whitehouse, Merkley, along with its sponsor Jack Reed all Democrats. Merkley and Reed sit on the Senate Banking Committee, which has jurisdiction over housing issues. (reports WSJ)

The proposal is being widely reported on in local and national media but what only a few are reporting sadly is:

Unfortunately, Durbin's mortgage modification idea has been placed on the back burner. Durbin isn't backing down, telling reporters yesterday that "it’s long past time for the Senate to step up to keep families in their homes and to help lead the way toward economic recovery.” Source: Durbin, Colleagues Push New Housing Bill | Progress Illinois
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Walt Schmidt, a mortgage-bond strategist at FTN Financial in Chicago, said the legislation would exacerbate the housing crisis as well as cause higher borrowing costs in the future. “Forcing lenders to modify mortgages and giving states the power to mediate is the surest way to prolong the housing crisis and slumping economy,” Schmidt said in an e-mailed comment. “The sooner ownership of residential real estate goes from ‘weaker’ to ‘stronger’ hands, the better for everyone.” Reports Bloomberg.com 10/1/09.

I e-mailed the editor and in my standard media e-mail have added:
The "Preserving Homes and Communities Act of 2009" may be last hope if it comes fast enough before many more lose their homes.
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The proposal is expected to receive broad support in Congress. "More and more households are finding that even with a fixed-rate mortgage that they could afford before the recession, they are just one pink slip away from losing their biggest investment," said Reed.

"Until we stabilize the housing market, we simply won't get a handle on the broader economic crisis," said Senator Dick Durbin (D-IL), a co-sponsor of the bill. "Voluntary efforts to keep families in their homes have failed. This bill will force lenders to modify qualified mortgages... Reports americanchronicle.com
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Reed said he and the co-sponsors met Tuesday with Treasury Secretary Timothy Geithner and HUD Secretary Shaun Donovan and asked them “to do more, and do it faster,” and to “put the emphasis on loan modifications.” Reed added, “They’re not adverse to other legislative approaches to help speed up the modifications, and we’re offering to give them more legislative tools to do the job.”Source projo.com (RI)

[davephx]

The Mortgage Bankers Association and others have many concerns with the bill, as making modifications mandatory could be problematic for market recovery.
Source: Real Estate Blog - New Bill to Help Homeowners with Foreclosures

[jet-a]

You know, I can't help but wonder if this is coverup for the MERS thing to keep it from blowing up?

[smithwood233]

Can you explain what you mean by the MERS coverup?

[smithwood233]

With all the money given to Wall Streets and Bank Streets, main streets are getting cr*p. Come voting time, they will have explaination and propaganda, but we must resist and remember how we, the mainstreets, are sold down the river.

[jet-a]

Originally Posted by smithwood233

Can you explain what you mean by the MERS coverup?

See this thread:

http://www.loansafe.org/forum/we-mus...mortgages.html

Imagine if more courts and more states start using this decision as precident? The banks would have a LOT of explaining and backpeddling to do. They would also lose a LOT of money.

[smithwood233]

Does the house we live in worth the thousandssss of dollars? Really? Does the land that it sit on worth the price? The land that it sit on most probably mean higher property tax later on. Are we looking for our property to appreciate in value? That "may be" hope and with hope, you know.

We want to save our home because we like it. Why are we treated like bandit who will benefit solely or the most? I think everybody wins. Government, who get one of their BIGGEST tax revenue, comes from property tax. Banks, will not continue to see their other properties decline in value if we can stop the foreclosure rate. Buy are so accustome to foreclosure sales, no other sales will really interest them, and you know that will mean lower and lower selling price. I can go on...

Once everybody have to or voluntarily turn in their key and tax revenue drop further and banks see their once safe properties drop in value and people wanting to get out, then they will realize...

Saving the house, is a win win for all, but we are treated like we are the sole beneficiary! Hahaha... They must understand and act with urgency as if we ALL benefit and not just play lip service.

Yes, the chaos of implementing new legislation and guidelines, come-on, there is a period for that and it may have come and gone. If their business really depend on it, they will get it done.

[jet-a]

Originally Posted by smithwood233

Does the house we live in worth the thousandssss of dollars? Really? Does the land that it sit on worth the price? The land that it sit on most probably mean higher property tax later on. Are we looking for our property to appreciate in value? That "may be" hope and with hope, you know.

We want to save our home because we like it. Why are we treated like bandit who will benefit solely or the most? I think everybody wins. Government, who get one of their BIGGEST tax revenue, comes from property tax. Banks, will not continue to see their other properties decline in value if we can stop the foreclosure rate. Buy are so accustome to foreclosure sales, no other sales will really interest them, and you know that will mean lower and lower selling price. I can go on...

Once everybody have to or voluntarily turn in their key and tax revenue drop further and banks see their once safe properties drop in value and people wanting to get out, then they will realize...

Saving the house, is a win win for all, but we are treated like we are the sole beneficiary! Hahaha... They must understand and act with urgency as if we ALL benefit and not just play lip service.

Yes, the chaos of implementing new legislation and guidelines, come-on, there is a period for that and it may have come and gone. If their business really depend on it, they will get it done.

They had better, for their sake. i feel that they have dragged their feet for too long. There is no need for people to have been waiting for 6 months, a year or longer to get help in holding on to their homes. The greed is definitely coming back to bite the banks in their backsides!

[ManicMangaManiac]

Originally Posted by Moe Bedard

I have seen so many bills and promises Slim. What have they done? More political propaganda...

I have to agree with Moe here. The HOPE Now program that was enacted under Bush is HOPEless, and Obama's Making Home Affordable Program hasn't really made homes affordable for the few who qualified. So why should I have any faith that this latest Congressional initiative will help us?? It's just more of the same old BS..... Sally