Just How Weak has the Response of the Current Administration Been?
The goal of this blog is to be informational on matters of real estate and not political. But you’d have to have your head in the sand not to acknowledge the industry professionals that criticize the current administration in DC for its many anemic attempts to help the nation’s current foreclosure crisis. “Feckless”, “gutless”, and “weak” are becoming common adjectives in the main stream media to describe the frequent new initiatives from DC to stem the tide of foreclosures and the failure of the Big Banks to offer meaningful modifications. The latest new initiative is designed to reduce documentation for home loan borrowers who are falling behind on their payments and to acknowledge that even borrowers who have stayed current on their payments should be allowed to short sell their homes.
“The rules go into effect Nov. 1 and also allow homeowners with missed mortgage payments and serious financial problems to submit fewer documents to be approved for a short sale. Homeowners will receive speedier approval if they are experiencing a financial hardship such as a lost job, divorce, death in the family or job relocation.”
Perhaps I am jaded as an attorney assisting people to find a safe harbor in this storm of mortgage failures, but these new changes sound to me like the very things that have always been accomplished by hiring an experienced attorney to help negotiate a short sale!
Is the government just trying to level the playing field for those intrepid enough to try to negotiate their own short sale or to trust their realtor to do it, perhaps after they attend a weekend course and get 4 new initials after their title? I have always had a suspicion that lenders, who still pay the largest part of short sale negotiation fees for borrowers, chafe at the bit the most over giving up that portion of their payoff that goes to the fee that convinces them of the wisdom to compromise. Nothing would delight lenders more than to enter into the arm wrestling match that is a short sale negotiation with unrepresented consumers or busy realtors who are showing homes or holding open houses. These small steps at attempted change often just strike me as attempts to steer consumers away from having full time, affordable, dedicated advocacy for their legal rights. Don’t be fooled by the smoke and mirrors!
All the while, the interaction of DC regulation and Wall Street banking business seems minimal. It reminds me of watching a parent try to discipline unruly children by creating more rules while never stopping business as usual to enforce the old rules. Does the current administration just rely too heavily on Wall Street political donations to dare do anything to really reign them in other than threaten to tax the individual owners more?