Monday, February 23, 2009

FORECLOSURE RELIEF QUESTIONS

Questions continue to hover over the foreclosure relief scene like low lying clouds. Of course, we've all heard the objections of those dutifully making their payments on time. Why should the responsible assist the irresponsible, is how the argument goes. In lofty philosophical arenas, the debate will likely rage for months to come, perhaps years.
But, on a more mundane level, I have been reading that foreclosure relief measures recently enacted may not achieve great results for very basic reasons. For starters, statistics indicate that as much as one-third of residential properties are not owner-occupied. As such, these properties are not eligible for refinancing or for mortgage modification under current relief measures.
Further, it is believed that many who will take advantage of refinance or modification will fall into default again, anyway.
Finally, there is nothing to coax lenders into participating in relief programs. If enough lenders take a pass, avenues for borrowers will be limited and many foreclosures will not be averted. Even lenders willing to participate may find difficulties in trying to restructure loans that have been sold in bundles on the secondary market.
While it is good news that something is being done and plans are being crafted to fix troubled mortgages, I wish that all the well-intentioned energy of lawmakers could be directed more toward outcomes and results rather than smithing sweeping, altruistic platitudes.

1 comment:

Drew "Omar" Linne said...

hi Uncle Frank!
I put a link to your blog on my blog.
just letting you know.
Bye!

-Drew