How is it that you know any nascent recovery in the housing market may not be all that it’s cracked up to be? When the Feds threaten even more meddling and leaning-on than they already have, that’s how.
Looking to jumpstart its foreclosure prevention plan, the Obama administration announced new steps Monday to pressure loan servicers to help homeowners long term.
Responding to complaints that too many borrowers are stuck in trial adjustments, administration officials said they will now focus more heavily on getting borrowers into permanent modifications. Government swat teams will go to the institutions to see what the holdup is and banks will have to submit progress reports twice a day during December.
"Now it's up to the banks to do their part to covert borrowers to permanent modifications," said Michael Barr, an assistant Treasury secretary. "Servicers to date have not done a good enough job."
Because nothing says increased efficiency and effectiveness like government swat teams (swat teams!) and having to devote valuable resources to generate two “what I did on my coffee break” reports a day. It’s just insanity.
The article goes on to say that only a small percentage of troubled homeowners have received permanent modifications which is raising concerns about the effectiveness of the $75 billion Treasury effort. And the statist response to failed statist policies? More statism:
Top loan servicers will be required to report the status of each modification and their plan to reach a decision. Also, these servicers must say how they will communicate decisions to borrowers.
Those failing to meet their obligations could face so-far unspecified penalties and sanctions.
How they will communicate decisions to borrowers? How about, “No. You are a bad risk. You had no business owning this home in the first place. Please leave us and find a nice comfortable place in which to foreclose.”
But we know that will not be allowed to happen because as referred to above, this country seems to be skipping merrily down that road of governmental stong-arming in the housing sector that was largely responsible for getting us into the very mess we are now.
We welcome any encouraging news that will counter the double-dip recession behavior we see by the government all around us.