As Congress considers putting the American people $700 billion further in debt to buy mortgage-related assets, it must also consider what to demand in exchange for this money. Because they would not be buying the actual mortgages, but would instead be buying investment interests in pools of mortgages, they would not inherently buy the right to control how those loans are serviced. If Congress buys into mortgages, it must require that Congress controls how those mortgages are serviced by the companies that deal with the consumer. The foreclosure problem has been worsened by servicing companies who put people into foreclosure rather than repayment plans. Therefore, if Congress is going to transfer this money, it must protect its investment by also obtaining the right to set the terms under which any loan is serviced. Additionally, Congress must also again allow federal judges to modify loans in bankruptcy to keep people in their homes.
Tom, this is the best proposal for the $700K that anyone has made.The servicing companies and asset mismanagers have driven the values down exponentially. They refused to modify, mitigate, or forebear. They made the situation worse by their false PR promising forbearance, debt forgiveness, modifications and mitigations to "hardship" debtors. Of course very few people have actual hardships according to the banks. I guess they figure the rest are Phil Gramm's whiners.
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