From the NEW YORK TIMES:
… The big weaknesses in the administration’s main antiforeclosure policy is that participation by lenders is voluntary and homeowners have little leverage to get better terms — especially reductions in loan principal when the mortgage balance is greater than the value of the home.
One way to change that would be for Congress to reform the bankruptcy law so troubled borrowers could turn to the courts for a loan modification if banks were uncooperative. Homeowners also need a simple process to challenge a bank if it uses incorrect information to deny a modification and justify a foreclosure, or if it refuses to divulge the facts and figures it used.
The administration also needs to alter refinancing guidelines so that many borrowers who are current in their payments are eligible to refinance to lower rates, even if their houses have declined in value. It needs to provide more legal aid to homeowners, using money authorized by Congress…
Click here to read the full article.
EDITOR’S NOTE: The Watchdog has been saying much the same for two years. Service organizations which represent the various owners of each parsed mortgage do not have the authority to “cram down” the principle and interest, even though when it isin the interest of borrower and lender alike. For some reason, the media doesn’t either understand or report this.
