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Franc Tireur 08-10-2012 10:40 AM

New rules aimed at helping homeowners

Giving homeowners more information on outstanding balances and pending interest rate changes is the aim of new rules for mortgage servicers proposed Friday by the Consumer Financial Protection Bureau.

The rules, a first for the entire mortgage servicing industry, would also require servicers to respond to homeowners' calls for information or complaints within 5 days. No such rules exist now.

Richard Cordray, director of the bureau, said the rules could be summed up as: "No surprises and no run-arounds."

"We want to make sure that at all times consumers can get information about how much they owe, what they are paying, and how their payments are being applied," Cordray said. "And if consumers fall behind on their mortgage, we want them to know how to assess their options and take action."

Related: What your home is really worth
That may come as a relief to thousands of homeowners who have tried and failed to get information from their servicers to prevent a foreclosure by refinancing.

Investigations into disastrous practices, including reportedly falsified documents, led state attorneys general to sue the largest mortgage servicers and eventually win a $25 billion settlement designed to help underwater homeowners earlier this year.

The bureau's proposed rules would overlap with some of the terms of the settlement in that both generally aim to get homeowners better information. But the rules would impact the entire mortgage servicing industry and are required by Wall Street reforms ushered in with the 2010 Dodd-Frank Act.

The proposed rules will dig into the bottom lines of big banks involved in mortgage servicing, said Jaret Seiberg, a senior policy analyst with Guggenheim Partners Washington Research Group, because the rules force banks to "engage in more one-on-one discussions with borrowers."

This economic mess started by mortgage scams, and if we want to put back this country in the right direction they need to fix the mortgage mess. It means that the banks and mostly Fannie Mae and Freddie Mac need to take the loss. Since they don't want to liquidated the debt, at least removing the sums of borrowed money above the market value that is not secured, there will never be a recovery.

After all, these banks were reckless and should be accountable for what they have done.

Are Fannie and Freddie on your side?


Is the agency in charge of Fannie Mae and Freddie Mac working for taxpayers or homeowners looking for help?

That's the question being debated after Edward DeMarco, the acting director of the Federal Housing Finance Agency, rejected the Treasury's proposal for a mortgage principal reduction program last week. His critics, from Treasury Secretary Timothy Geithner to columnist Paul Krugman, protested what some regarded as DeMarco's heartless decision. The policy, the Obama administration argued, would keep troubled borrowers in their homes, avoid a further wave of distressed home sales and thus revive the sluggish economy. For DeMarco, the reasoning seemed clear – he was protecting taxpayers, not a few homeowners.

The Federal Reserve estimates that $7 trillion in value has been wiped out since the subprime mortgage-fueled meltdown and housing prices are still down about a third overall. But a major issue now is "shadow inventory" – the millions of homes either in or moving toward default, which will probably lead to massive numbers of forced sales.

The Treasury has initiated a series of programs for modifying loans or helping under water borrowers – those with homes worth less than the outstanding principal of their mortgages – to refinance at lower rates. But the government says there are more than 11 million homes that are under water. Goodman says as many as 9 million homes could be pushed into distressed sales in the next few years. But in the first five months of this year only 78,000 borrowers were able to refinance under the government program, which is why some experts feel principal reductions are essential.

IMO the principal reductions are essential to fix the market problem, not everybody think that way unfortunately, but that will allow to liquidated the debt and put the people back on their feet and give an additional chance for the economic recovery. People can sell their house to the market prices, move to another location for job promotion or higher job position, free and create construction jobs, etc

They must unlock this major market, and make prosperity again in this country or we will stay in stagflation.

Let's debate your point of view on this subject.

Jim Gillum 08-11-2012 09:04 AM

The clog in the housing market is caused by the %^&^^%$..banks..

We have been trying to buy another home for almost a year....
they keep changing the rules...
they do not do business in a business like manner...
and they do nothing in a timely fashion.....

We have friends facing the same problems......

There are hundreds of homes.....nay...thousands in Central Florida that have not been released on the market....

They sit empty.....victims of the failed help system that the useless government supposedly put in to place to help all these people...
Where did all that money go?....

That is one downside to getting old...you may not get smarter....but you get to see more....

The banks and the elevator deal....
They get the money and we get the shaft....


Zap 08-13-2012 06:30 AM


The banks are drowning and need help. The government provides them with trillions in taxpayer cash.

The people are drowning and need help. The government provides them with ...

Giving homeowners more information on outstanding balances and pending interest rate changes is the aim of new rules for mortgage servicers proposed Friday by the Consumer Financial Protection Bureau.
Who does the government work for?

Franc Tireur 08-13-2012 09:00 AM


Originally Posted by Zap (Post 1909035)
Who does the government work for?

Well the governement work for the 12,000 lobbyists registered in Washington DC, but mostly for the masters of this system which are the shareholders of the Federal Bank Reserve and the major mega banks.

Jim Gillum 08-13-2012 10:32 AM

The government in the US works for self preservation and internal growth....

That is why we must continue to fire elected officials until they remember....
"For the people"......

Franc Tireur 08-13-2012 11:41 AM

I could be wrong but the regulations were in place to safeguard the good functionning of the system. IMO, these regulations were removed to engineering a "controlled collapse", perhaps to implement another system less democratic, one world government.

As we witnessed the last years, internal growth is for the top class. Multi national corporations, and financiers worked to pay more the executives and less the working people and reduced the credit flow. Whatever you call it economic bubbles or business cycles, they are engineered by the federal bank reserve which is private by the way.

As far as the government in the US works for self preservation, they really do a bad job by unprotecting US citizen jobs and shipping them overseas in countries working for slave wages.

The consequences of this kind of policy resulted by skyrocking national unemployments and reducing US worker wages. Now we are in another stage which are insolvency at all levels. Many states are going to have some hard times to buckle their budgets, many cities go bankrupt, cities reducing police officers, firefighters, city workers, etc

At the US citizen level, we see cities raising service prices of water and sewer about 20%, gas. food, commodities, etc oops the incomes not only reduced but in general corporations don't want to increase a minimum percentage every years to follow the inflation. Inevitably this kind of policy is going to fail and I am sure they know that.

The bigger picture is in general when a government and the system is on the verge of collapsing, they go rogue and could be unpredictably dangerous.

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