Yesterday we fulminated at the failure of the Treasury Department to include mortgage counselors, one of the constituencies in the original Hope Now Alliance, in the efforts to craft a plan a to salvage subprime borrowers facing resets. This was a major oversight since the counsellors will play an essential role in gathering information from and helping assess candidates for the program. Failure to involve them would run the risk that the program would commit to targets that were not attainable.
I’ve been informed that this oversight has been remedied.
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If Im not mistaken, this entire mess can be pinpointed to counsellors that gathered information in the form of no documentaion loan aplications and then allowing unqualified candidates to be in this position of being bailed out! This is so bogus and looks like FEMA trying to send in very late help for Katrina!!
Re: counsellors will play an essential role in gathering information from and helping assess candidates for the program
ALERT: Sit down for this:
Other highlights from ForeclosureRadar’s August Foreclosure Report include the fact that fully 90.3 percent of all foreclosure sales in California were for homes purchased or refinanced in 2005 and 2006. Of properties sold at auction, 95 percent went back to lenders – for a total of 9,015 properties with a loan value of $3.7 Billion dollars. Notices of Default, the first stage of the foreclosure process, rose by 16.3 percent in August to 26,563, and Notices of Trustee Sale, which set the auction date and time, fell by 2.2 percent to 12,896.
I still think the subprime “thing” is a billion dollar problem, but banking bad bets and illiquidity is a multi-trillion dollare problem and it still doesnt add up! Whats going on???
Note to anonymous #1:
You are correct that the mess is due to lack of gathering of information, etc.
But, you are incorrect that the ‘counselors’ referred to in this post are the same folks who failed to gather that information.
The counselors in this case are non-profits who specialize in counseling low-income people. A huge part of the problem is that the kind of skills and experience they bring were NOT part of the routine during the run-up. Mortgage brokers, banks and others did NOT counsel people. They simply pushed for more and more and more. The significance is that the core skills required for well counseled, well advised borrowers were NOT part of the ‘system’.
Now that there’s the big mess, government and others have reluctantly turned to the only people in the nation who know how to counsel: non-profits.
Whether or not these non-profits are given equal footing at the table where problem-solving is being done; and whether or not they will be fairly compensated for their much needed skills are two separate questions.