Because banks haven't exactly been hustling in their efforts to modify mortgages, the Treasury Department today announced that mortgage lenders will face increased pressure to provide modifications and possibly face fines if they don't. But according to the New York Times, some members of Congress believe that it's time to move on to another type of program.
"Some senators contend that the Treasury program, addressing mortgages whose low promotional interest rates had soared, is outmoded. At this point, foreclosures are being propelled by joblessness, which is sending millions of previously credit-worthy people with ordinary mortgages into delinquency. Within the Senate, some discussion now focuses on pursuing legislation that would create a national foreclosure prevention program modeled on one started last year in Philadelphia. That program forces mortgage companies to submit to court-supervised mediation with delinquent borrowers aimed at striking an equitable resolution before they are allowed to proceed with the sale of foreclosed homes."
Meanwhile, the release of an academic paper that advises homeowners to walk away from their mortgages is now causing lots of headlines, news which probably is delightful to all those "You Walk Away" businesses.
· Treasury Pushes Mortgage Firms for Loan Relief [NYT]