What a Surprise- "Banks aren't modifying loans" says Treasury

Something many of our readers are familiar with is now news at the New York Times. "U.S. Will Push Mortgage Firms to Reduce More Loan Payments" is the headline of today's story. It continues,

The Obama administration on Monday plans to announce a campaign to pressure mortgage companies to reduce payments for many more troubled homeowners, as evidence mounts that a $75 billion taxpayer-financed effort aimed at stemming foreclosures is foundering.

“The banks are not doing a good enough job,” Michael S. Barr, Treasury’s assistant secretary for financial institutions, said in an interview Friday. “Some of the firms ought to be embarrassed, and they will be.”

To those who have been frustrated dealing with mortgage companies, such as Wells Fargo, in requesting a modification or approval of a short sale, for that matter, this may come as welcome relief.

Will Treasury be effective? Doubtful, my personal experience on behalf of a client dealing with Wells Fargo indicates that Wells is blaming Freddie Mac for the hold-up in approvals. Unless the ultimate investor is pressured, don't expect any relief; you just can't embarrass these guys.

Read the full article.

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