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Rep. Barney Frank Threatens Banks To Stop Foreclosure Or Else?
July 28th, 2009
Frank who is chairman of the
Housing Financial Services Committee also said that his committee will not consider
any legislation to help banks lend more unless they saw a big increase in loan
modifications.
Earlier in July, more than 24
mortgage companies have closed a deal with Timothy Geithner
to set the goal of 500,000 modifications by November 1st 2009.
Frank’s statement was released at a time adding momentum to the deal struck
between the 2 parties.
There are still a lot of
uncertainties as to whether this can be achieved. Banks voiced that they were
struggling to catch up and clear the backlog of customer requests, applications
by hiring and training thousands more employees. Not to mention, the banks are
also trying to sort through the bulk of applicants and identify those who have
legitimate financial hardship.
In addition to the obstacles,
many of the mortgages were repackaged into mortgage-backed-securities and sold
to investors worldwide therefore making it difficult to modify loans. In order
to modify a loan, the bank will need the permission of the investor.
Earlier in the spring of 2009,
Congress had tried to pass legislation that will allow homeowners to keep their
homes if they filed for bankruptcy. This was intended for people who own and
live in their primary home as appose to real estate investors who own several
homes. The proposed legislation that was strongly supported by President Obama was eventually blocked and defeated by bank
lobbyists.
The measure was defeated by a
45 to 51 vote, falling short of 15 votes from the 60 needed to overcome
procedural hurdles.
Frank said that the people in
the loan servicing industry including the financial banking industry must know
that if the last attempt to produce a large amount of modifications fail, the
option of reviving the bankruptcy option will be a very urgent one.
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News Archive
U.S Government Wants 500,000 Trial Modifications By Nov 1st - July 28th 2009
Subprime Brokers Involved In Loan Modification Scam - July 21st 2009
'Walk-Away' Survey Shows 26% of Defaults Are Intentional - July 21st 2009
'Own-To-Rent' The New Emerging Mortgage Plan - July 17th 2009
Tools To Help Homeowners Save Big In Property Taxes - July 16th 2009
Lawmakers Dissapointed With Foreclosure Help Programs - July 16th 2009
New Jersey Attorney General Goes After Mortgage Scams - July 15th 2009
Watch Out For Some Misleading Reverse Mortgage Advertisements - July 6th 2009
Chase And Bank of America To Experience 2nd Wave of Foreclosures - July 6th 2009
Obama Extends Mortgage Refinancing Program, Raising New Limit To 125% - July 1st 2009
Paper Avalanche, Lack of Trained Staff Add Obstacles To Loan Modification Program - June 29th 2009
Government Loan Modification And Refinance Program Shows Substantial Progress - June 18th 2009
Luring First Time Homebuyers, Tips To Beat The Competition And Sell Your Home - June 15th 2009
Bank Of America has modified 50,000 loans in Countrywide settlement - May 26th 2009
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U.S Government Wants 500,000 Trial Modifications By Nov 1st
New York – The Treasury Department announced that there will be an increased speed in mortgage modifications under the Obama foreclosure prevention program. The administration is expecting to see 500,000 trial modifications put in place by Nov 1st 2009 with 200,000 already underway. - Read Full Story.
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