“These bankers should be shown for what they really are to the public: vulgar robbers, thieves in ties, pickpockets and obstinate kleptomaniacs.”—Hugo Chavez
“Our office has been aggressively considering proposals on all areas that we can do to address the foreclosure crisis in this country”—Phyllis Caldwell, chief of the Treasury’s Homeownership Preservation Office.
In keeping with the dictates of Venezuelan President Hugo Chavez, Brother O plans to stop all home foreclosures unless they have been rejected by the Bread and Circuses Administration’s Home Affordable Modification Program (HAMP) and force all lenders to make principal reductions to help struggling homeowners.
Currently, lenders can begin foreclosure proceedings on any loan that hasn’t been submitted for HAMP eligibility even while borrowers are under review for the program or in a trial modification.
The proposed changes would prohibit lenders from beginning new foreclosure proceedings before loan screening by HAMP and would require lenders to halt existing proceedings for borrowers once they are in a trial repayment plan.
Republicans claim that HAMP is worsening the economic crisis and that many homeowners would be better off renting. They say Brother O’s foreclosure plan will distort the housing market by keeping people in their homes who would be better off going through foreclosure.
Republicans say homeowners who enroll in the program and drop out “would be better off to default early and make payments on more affordable housing options.
My good buddy Ladd thinks that Brother O’s plan to force banks to reduce principals on mortgages is a blatant abuse of executive power suggestive of a banana republic dictator. I think he’s right.
I.M. Kane
Obama Considers Halting All Home Foreclosures
By Frank McGuire
President Barack Obama reportedly is considering stopping all home foreclosures unless they have been rejected by the administration’s struggling $75 billion mortgage assistance program.
The move comes as Republicans take aim at Obama’s mortgage assistance program. Republicans argue the effort is making the economic crisis worse and say many homeowners would be better off as renters.
The president has been trying to convince investors and the general public that the country is slowly emerging from the recession, but the threat of foreclosures and a faltering housing recovery has been looming over the economy.
Meg Reilly, a Treasury Department spokeswoman, told Bloomberg that the proposed foreclosure ban was “one of the many ideas under consideration” in Obama’s attempt to stabilize the housing market.
“This proposal has not been approved and there are no immediate planned announcements on the issue,” she wrote in an e-mail. She confirmed the authenticity of the plan, which hasn’t been made public, Bloomberg reported.
Right now, lenders can initiate foreclosure proceedings on any loan that hasn’t been submitted for Home Affordable Modification Program, or HAMP, eligibility. Under current rules, foreclosure litigation can proceed while borrowers are under review for the program or even in a trial modification.
The proposed changes would prohibit lenders from initiating new foreclosure actions before loan screening by HAMP and would require lenders to halt existing proceedings for borrowers once they are in a trial repayment plan, Bloomberg reported.
Meanwhile, Reps. Darrell Issa, R-Calif. and Jim Jordan, R-Ohio., on Thursday called the program a misuse of taxpayer money, The Associated Press reported. Though $75 billion has been set aside for the program, so far only $15 million has been spent.
The lawmakers also said Obama’s plan distorts the housing market by keeping people in their homes who would be better off going through foreclosure.
Homeowners who enroll in the program but then drop out “would have been better off if they had defaulted earlier and spent the payments on more affordable housing options,” the two lawmakers wrote.
Obama administration officials, however, reject that argument. They say the program gives a second chance to homeowners who were given shoddy loans during the housing boom.
And they defend their track record, even though only 116,000 homeowners have completed the process out of the 1 million enrolled since the program’s launch last March.
THE MILLSTONE DIARIES 