Foreclosures Instilling A Sense Of Urgency

Foreclosures are rising not by thousands but by millions. With everyone being affected the officials are stirring themselves to find a remedy. Texas Attorney General Abbott has been very proactive and set out proposals involving lenders, borrowers and community organizations.

Abbott held a meeting with four of the top lenders in the country – Citigroup, HSBC, Wells Fargo and Chase. He reasoned with them to come forward and implement the measures suggested by him.

The end of 2008 will see $600 billion sub-prime mortgages being reset to higher interest rates. It will make it impossible for the majority of the borrowers to carry on and consequently they will fall into the trap of foreclosures. Their home fires will die out.

Abbott stressed on the heavy negative impact of foreclosures on the housing industry. It has already begun to change the colour of the entire economy and if something is not done fast none will be spared. Resolving the problem is thus vital for the health of the economy of Texas. Dispossessing people from their houses will not bode well for anybody. The house owners are the homemakers and they are the pillars on which American society stands.

Abbott wants to take preventive measures first and stave off further defaults leading to delinquencies. He wants the lenders to open talks with the borrowers and help them to renegotiate the mortgage to longer terms with fixed interest at a lower rate. Before sending an intimidating impersonal notice the lenders should open lines of communication with the frightened victims. The attitude must never be confrontational. This will give a fillip to the hapless borrower and motivate him or her to work hard finding ways and means to continue with the repayment schedule. Abbott further wanted the setting up of a committee that would see to each individual complaint and give feed backs to his office. He wanted lenders to do away with penalties and burdensome fees. He was specific about the lenders contacting him within 30 days about the concrete steps he has taken. He wants details about how many ARM’s have actually been converted and the number of services that have been waived. The borrowers are being contacted over phone and mail with words of reassurance and counseling. The crux of the problem is that as yet legally no steps can be taken to rope in offending lenders.

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