Less Than One Percent Of Modified Mortgages In Obama Foreclosure Plan Involve Principal Cuts

[laughingliberal]

As few as 0.1 percent of mortgage modifications initiated under the Obama administration's signature foreclosure prevention program involve reductions of principal, according to a federal report released Wednesday.

Research by state regulators, academics, and by the Federal Reserve shows that principal reductions lead to more sustainable loan modifications. In other words, they're the best way to ensure that troubled borrowers don't lose their homes.

But of the nearly 121,000 troubled loans that have been modified by large banks and thrifts under the administration's Home Affordable Modification Program through March, just 120 of them involved a cut in principal, according to the report by the Office of the Comptroller of the Currency and Office of Thrift Supervision.

The Treasury Department has consistently said that the share of modified mortgages that incorporate a permanent reduction in principal is "under 10 percent." Phyllis Caldwell, chief of Treasury's Homeownership Preservation Office, reiterated that figure Wednesday on a conference call with reporters, acknowledging that the figure fluctuates as more trial modifications convert to five-year plans.

http://www.huffingtonpost.com/2010/06/23/less-than-one-percent-of_n_622586.html

[Oregone]

1. Yeah, they don't like to change the rules mid-game...

Unless it benefits them:
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x4439601

[NYC_SKP]

2. Glad that those mortgages serviced became sustainable, which was the objective.

If the principal was high due to a high sales price, one can't really fault the lender.

The predatory rates and sub-prime schemes are what put many people into dire straights.

But the purchase price agreed to, that's something every home buyer needs to be cautious about.

121,000 mortgages modified, that's a good start.

It seems to me that there must be many, many more.

And what we need to do, additionally, is try to ensure that this bullshit unregulated market never gets away with this crap again.

:patriot:

[dkf]

8. Makes sense to me.

No one can say the purchase price was hidden from them. Shady teaser rates and being tricked into subprime rates when you should have qualified for a prime mortgage are the type of thing we should be fighting.

[Kalun D]

3. That Rolling Stone Reporter

Needs to do an interview with Timmy (the shyster) Gietner and Ben (bushie) Bernanke and record them talking trash so they can be sh*tcanned.

[truedelphi]

4. Funny thing about that - Geithner has already lied at least

Three times to Congress. He has said repeatedly that there was simply no way to go about the reorganizing of the Economic collapse, without a TARP style Bailout.

That is not true at all. There are laws on the books that were enacted at the time of the S & L crisis that could have been followed. But had those laws been followed, it would not have been possible for the Too Big To Fail Crowd to be receiving the monies. Instead the monies would have gone to regionally state chartered banks, who would have followed the strict S& L crisis era restrictions and regulations on how to loan out those monies (No small thing when you are talking about 700 Billion bucks.)

he repeated this lie to the Oversight Committee just yesterday. (He also called Ms Warren "Sharon Warren, rather than the name "Elizabeth" but then when you are as high and mighty as Timmy the Elf, why would you give a rat's ass about an oversight committee chairwoman's name.

he also lied back in February 2009, when he told Congress that upwards of 300,000 mortgages had been modified by the various mortgage legislation put in place by the Obama Administration. Don't know where he got that number - Kucinich couldn't find more than 500 mortgages modified in Ohio by Feb of 2009.

[DesertFlower]

5. a construction guy i know had his

interest rate reduced. his mortgage payment went down $800, but he originally had a 20 year note and he had to take a 30 year. at least he's not going to lose his house.

[noamnety]

6. Quote from end:

"Voluntary programs don't work," Waters said Tuesday. "I'm going to speak honestly: HAMP was written by the Treasury and the servicers. They're not doing anything in that program that they don't want to do. And that's why the program isn't working."

[laughingliberal]

7. Yes, handing the institutions $75 billion with no demand they actually help any homeowners...

doesn't seem the work of the best and the brightest.

An article from yesterday had Warren grilling Geithner on the abysmal performance of HAMP. Geithner conceded it wasn't very effective but it was a kind of shoulder shrugging, "so what?" admission. And the obligatory, "scarce resources," we always seem to be faced with when people (as opposed to corporations) need help.

[dkf]

9. Actually it Is the government that can't afford to pay FDIC insurance on the failure of a big bank.

If the big banks crash so does the treasury I would imagine.