The Pressure is on the Obama Government to Speedily Fix Foreclosure Problem

February 19th, 2009 | Tags: Foreclosure Notice

The federal officials are conferring on the foreclosure related housing crisis as pressure is on the Obama government to speedily fix the problem. The legislators and the regulators want a moratorium to be placed on foreclosures until the execution of the new plan.

Very recently the Treasury Secretary Tim Geithner said that the plan for tackling the housing crisis would be unveiled within few weeks. He outlined broadly the plan the new government will take. $50 billion will be used to reduce the monthly mortgage payments.

Rep. Barney Frank (Democrat) said, “I would ask all of you now to please make sure that we have a moratorium in effect. It would be until we get that program, and until you know if people can qualify. Having someone suffer foreclosure because two weeks hadn’t gone by for this program would be unacceptable.” He was speaking to prominent bank executives.

The Office of Thrift Supervision has in the meantime pressed over 800 institutions that come under its regulation to suspend foreclosure procedures until the plan of the new government is finalized. OTS Director John Reich said, “OTS-regulated institutions would be supporting the national imperative to combat the economic crisis by suspending foreclosures until the new plan takes hold.”

Many of the jumbo financial bodies like JPMorgan Chase, Fannie Mae as well as Freddie Mac had already placed foreclosures on hold while they were getting together their loan modification plans and enforcing the same. Many states like Massachusetts have put into force foreclosure bans for a short period. Obama himself is also calling for a moratorium during the transition period.

The officials of the Treasury and Federal Housing met in private for about hour and a half representatives from the industry and community advocates. The housing plan was discussed. The government lent an ear to various proposals coming from them. The general opinion was that there should be a standard and streamlined approach to the plan of modifying loans. There were also suggestions that a good part of the funds be spent for helping those facing foreclosures by getting them into affordable mortgages with low interest rates and waiving part of the principal.

John Dalton the President of Housing Policy Council said, “They are moving at a good clip to get it done, but they want to make sure they get it right.”