Inquiring minds are digging into a Fed white paper regarding The U.S. Housing Market: Current Conditions and Policy Considerations.
Here are a couple of key snips. The bold headings are mine.
Overriding Private Contract Rights
In a story about all the former subprime mortgage brokers who are now in the business of "helping" people get loan modifications, the NYT details the unsavory—and, according to the FTC, illegal—practices of a California outfit called the Federal Loan Modification Law Center.
Back when the Executive and Congress at least pretended not to abdicate all power to the Fed, one of the centerpiece programs designed to boost the housing market for the benefit of the poor (as opposed to letting Ben Bernanke make marginal US housing a rental industry owned by a handful of private equity firms and hedge funds), was Barack Obama's Home Affordable Modification Program (or HAMP), which attempted to prevent foreclosures by lowering distressed borrowers’ mortgage payments.
The move by the Federal Trade Commission comes as federal and state officials plan to expand a crackdown on mortgage-related scams to other schemes that prey on debt-ridden consumers.
Federal regulators, taking aim at a common tactic used in mortgage frauds, will look at a nationwide ban on companies' charging upfront fees for helping homeowners modify loans to avoid foreclosures.
Spanish loan delinquencies as a percentage of the total have risen for the 8th straight month to a new record high of 13.00% (even as sovereign bond spreads continue to plunge to multi-year lows signaling all is well). With unemployment rates stuck stubbornly high, however, reality is starting to dawn in the Spanish banking system as mortgage defaults are rising following the Bank of Spain's order for lenders to review their portfolios.
As the federal government's flagship mortgage-modification program comes under scrutiny for failing to meet its goal of helping 3 to 4 million troubled homeowners, state-level efforts to boost modifications appear to be picking up momentum.
The Obama administration is expected to outline its plan to curb home foreclosures on Friday.
The new program would allow those who owe more on their mortgages than their house is currentcy worth to get new loans backed by the Federal Housing Administration.