The economy is getting better so we’re told, but don’t expect to get a job soon if you’re a Southern California resident.
And if you’re a homeowner in trouble with your mortgage, the US House of Representatives has voted to cut the president’s federal Home Affordable Modification Program.
The House majority Republicans called the program ineffective and said it gave false hope to hundreds of thousands of homeowners who still lost their homes despite the program, something we agree with.
We don’t agree, however, that some type of assistance should not be given to homeowners with troubled mortgages. We did it after all for the banks, which by the way are even bigger today than back when they were “too big to fail.”
Today, many of those same banks hold the mortgages of homeowners in trouble.
The problem was not that there was a program, but that the program had numerous structural flaws that caused it to be ineffective. HAMP lacked sensible regulations and oversight and too many of the home modification groups providing homeowners with assistance to get their mortgages payments lowered did not know what they were doing.
And perhaps most importantly, HAMP lacked the teeth needed to force those who created the mortgage crisis to reconsider the rights of homeowners to recoup their investment when their homes were foreclosed on and sold to “investors.”
Even now, as we see home prices fall again in Metro areas, we see the same culprits who sold bad mortgages to unsuspecting buyers continue to advertise their mortgage programs in the media. We even saw a television commercial recently for Ally Financial, formerly known as GMAC, which last year was forced by former State Attorney General Jerry Brown to prove that it was complying with state law, after a company executive admitted his review of thousands of critical foreclosure documents was, according to Brown “a sham,” or stop all its foreclosures in the state.
While it appears unlikely that the U.S. Senate will vote to end HAMP, the financial crisis facing homeowners needs serious attention.
Regulators have still failed to back tighter mortgage securities rules, and home prices in Metro areas continue to fall. Banks continue to post record profits and the mortgage mess seems to have been swept under the rug by government officials, banks and Wall Street.
Only the homeowners, whose equities were wiped out, causing many to be left homeless, continue to pay for a crisis mostly not of their own making.
Since the perpetrators of one of the country’s worst financial crisis have been given a big boost to right their finances, it’s only fair that the taxpayers who funded their come back be given the same opportunity.
Fix HAMP, don’t kill it.Posted - Copyright © 2022 Eastern Group Publications, Inc.