Is the government plan to encourage modifications a better approach than doing nothing?

Asked by Suz A, Longmont, CO Mon Mar 28, 2011

The headlines have given details of a plan to fine the banks $20 billion for their acts during the "robo-signing" crisis, and use these proceeds to modify distressed mortgages. A number of suggestions have been floated, including one that was posted on Trulia. Three years ago, RealtyTrac posted a suggestion to use $220 billion to modify mortgages. The question then was whether the Bush administration should spend $700 billion on a bailout versus the $220 billion RealtyTrac proposed.

Well, we know the answer.

But, we're no closer to cleaning up foreclosures than we were 3 years ago.

Here are some relevant links:
http://www.trulia.com/blog/realtytrac/2008/12/can_we_save_70…
http://www.bcbr.com/article.asp?id=56160
http://online.wsj.com/article/SB1000142405274870384200457616…
http://agonist.org/numerian/20110225/mortgage_deal_being_dis…
http://www.nytimes.com/2011/03/04/opinion/04fri1.html_r=2&hp

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Answers

9
David Chiles, Other Pro, Los Angeles, CA
Mon Mar 28, 2011
BEST ANSWER
Whatever helps is a good thing. Planning and execution are what matter with any program.
1 vote
Suz A, Agent, Longmont, CO
Fri Aug 19, 2011
||||||||||||| UPDATE ||||||||||||||||||||||| August 19, 2011

FHA Announces New Loss Mitigation Rules
http://www.dsnews.com/articles/fha-announces-new-loss-mitiga…
1 vote
Tean Wong, Agent, Boston, MA
Fri Jun 10, 2011
As long as the home owner is not forced to foreclose, or has to shortsales, it would help lower the inventory in the market.
1 vote
Minna Reid, Agent, Woodbridge, CT
Fri Jun 10, 2011
Loan modifications only prolong our problem. They are not the answer. Declined values are the problem. Until we clear out the overleveraged inventory we wont have any recovery.
Short sales and foreclosures will eventually accomplish that. Now if banks want to help - bring on the principal reductions.
Web Reference:  http://www.homesbyminna.com
1 vote
Brian Burke, Agent, Highlands Ranch, CO
Sat Jun 4, 2011
I want to point out that doing anything is always better than doing nothing.
Brian
1 vote
Chris Ratay, Agent, Boulder, CO
Mon Mar 28, 2011
Good food for thought for a Monday!
1 vote
Suz A, Agent, Longmont, CO
Mon Sep 26, 2011
|||||||||UPDATE||||||||||||

From article in Bloomberg:
The policy over the past 30 years of giving the big banks pretty much what their executives want has proved to be an unmitigated disaster. It’s time to change that in a fair and reasonable manner. Let every disputed mortgage case be examined separately, using the full process of the law. If that prospect is too daunting for the banks accused of serious misconduct, then they should reach a settlement that’s big enough to make a difference.

|||||||||Simon Johnson, who served as chief economist at the International Monetary Fund in 2007 and 2008, and is now a professor at the Massachusetts Institute of Technology and a senior fellow at the Peterson Institute for International Economics, is a Bloomberg View columnist. The opinions expressed are his own.

http://www.bloomberg.com/news/2011-09-26/u-s-needs-a-meaning…
0 votes
Suz A, Agent, Longmont, CO
Fri Aug 26, 2011
|||||||||||| UPDATE ||||||||||||

Some updates that will affect inventory - The Street is reporting:
The federal government will be bulk-selling the massive portfolio of foreclosed homes now owned by HUD, Fannie Mae and Freddie Mac to private investors -- vulture funds.

These homes, which are now the property of the U.S. government, the U.S. taxpayer, U.S. citizens collectively, are going to be sold to private investor conglomerates at extraordinarily large discounts to real value.
http://www.thestreet.com/story/11224917/1/a-huge-housing-bar…

Bloomberg is reporting:
An increase in short sales, along with a shorter average time to sell such homes and bigger discounts relative to normal deals, indicate the market is clearing distressed properties more efficiently, Chief Executive Officer James J. Saccacio said in the statement. Total pre-foreclosure deals rose 19 percent from the first quarter, while slipping 12 percent from a year earlier, when a federal tax credit pumped up demand.
http://www.bloomberg.com/news/2011-08-25/home-short-sales-ju…
0 votes
Brian Burke, Agent, Highlands Ranch, CO
Mon Mar 28, 2011
Know body knows what the answer will be. I will take anything Realtytrac says with a Grain of salt. Realtytrac is all about supplying bogus Info to the Buyers for a Fee. Realtytrac is not an expert on Foreclosures just a means to get money. To answer your your question Doing something is almost always better than doing nothing.
Brian
0 votes
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