It appears that 2/3 of mortgage servicers are on board the Obama foreclosure boat has it heads to neighborhoods to rescue struggling homeowners. The boat is leaving the port very soon and the remaining mortgage hold outs will most likely will drown in a sea of bad PR if they don’t jump on the Obama ship, FAST!
Washington Post:
Two-thirds of mortgage servicers have agreed to implement the foreclosure-mitigation policies outlined by Treasury Secretary Timothy Geithner last week, a top Senate Democrat said Wednesday.
This includes the four-largest national mortgage servicers: Bank of America Corp. (BAC), Citigroup Inc. (C), J.P. Morgan Chase & Co. (JPM) and Wells Fargo & Co. (WFC), according to a senior financial-industry lobbyist.
Sen. Charles Schumer, D-N.Y., the No. 3 Senate Democrat and a member of the Senate Banking Committee, said mortgage servicers had a lot more confidence now that the Obama administration had provided details of how it wanted banks to tackle the foreclosure problem.
“Two-thirds of servicers are the large banks that are part of the [Troubled Asset Relief Program],” Schumer said. “They’ve already agreed they are going to refinance now that they are no longer worried about getting sued.”
Moe: The agreement comes after Schumer had blasted mortgage servicers back In November with this statement:
“These voluntary plans sound nice, but they don’t do the job. No amount of incentives for investors can change the fact that a program like this will only really work if Fannie and Freddie hold the whole loan, which is true in too few cases. When the loan is chopped up into a million pieces and any investor can block a modification from happening, a program like this will only scratch the surface of the mortgage crisis. The only viable solution, and it is one we will take up under President-elect Obama, is to modify the bankruptcy code,” Schumer said in a statement.
More from the Post:
An aide to Schumer said new Housing and Urban Development Secretary Shaun Donovan gave the senator the two-thirds figure.
He also said that the prospect of a law amending the bankruptcy code to allow judges to dictate new terms on mortgages in the event of an individual filing bankruptcy, was also likely a significant factor in the companies’ willingness to cooperate with the administration’s plans.
The House is working on legislation which would be aimed at helping people in bankruptcy to hang on to their primary residences. It could see bankruptcy judges compelling mortgage-servicing companies to accept new terms on an individual’s mortgage.
Read more from the WashingtonPost
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