Thank You New York Times

From today's issue of the New York Times. My comments are in bold italic.

November 29, 2009

U.S. Will Push Mortgage Firms to Reduce More Loan Payments
By PETER S. GOODMAN
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.

Foundering? It was a poorly written piece of legislation designed to protect the banks from taking a bath on properties that were worth less than the loans. Make no mistake, it was always about protecting the banks, never about helping people.

“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.”

So you're going to try to embarrass financial corporations who pushed for the TARP bailout? These people have no shame, you can't embarrass them.

Even as lenders have in recent months accelerated the pace at which they are reducing mortgage payments for borrowers, a vast majority of loans modified through the program remain in a trial stage lasting up to five months, and only a tiny fraction have been made permanent.

Mr. Barr said the government would try to use shame as a corrective, publicly naming those institutions that move too slowly to permanently lower mortgage payments. The Treasury Department also will wait until reductions are permanent before paying cash incentives that it promised to mortgage companies that lower loan payments.

Shame as a corrective measure. Really folks? Really? What do they care if they get the money? This is just a thinly disguised PR campaign anyway. Most of the banks have already chomped away at that big old $700 billion dollar pie. Who cares if they miss $1,000 here or $1,000 there.

“They’re not getting a penny from the federal government until they move forward,” Mr. Barr said.

My ass.

From its inception early this year, the Obama administration’s program, called Making Home Affordable, has been dogged by persistent questions about whether it could diminish a swelling wave of foreclosures.(It can't) Some economists argued that the plan was built for last year’s problem — exotic mortgages whose payments increased — and not for the current menace of soaring joblessness.(Duh) Lawyers who defend homeowners against foreclosure maintained that mortgage companies collect lucrative fees from long-term delinquency, undercutting their incentive to lower payments to affordable levels.

Last month, an oversight panel created by Congress reported that fewer than 2,000 of the 500,000 loan modifications then in progress had become permanent under Making Home Affordable. When the Treasury releases new numbers next month, it is expected to report a disappointingly small number of permanent loan modifications, with estimates in the tens of thousands out of the more than 650,000 borrowers now in the program.

More unsatisfactory data is likely to intensify pressures on the Obama administration to mount a more muscular effort to stem foreclosures beyond the Treasury’s campaign this week. Populist anger has been fanned by a growing perception that the Treasury has lavished generous bailouts on Wall Street institutions while neglecting ordinary homeowners — this, in the midst of double-digit unemployment, which is daily sending more households into delinquency.

Funny, didn't I say that? By the way, it's not a perception it's the truth. Banks---$700 billion, American homeowner and taxpayer---screwed.

“I’ve been very frustrated by the pace of the program,” said Senator Jeff Merkley, an Oregon Democrat who sits on the Senate Banking Committee. “Very few people have emerged from the trial period.”

Though the administration’s program was initially proclaimed as a means of sparing three to four million households from foreclosure, “they’re going to be lucky if they save one or one-and-a-half million,” said Edward Pinto, a consultant to the real estate finance industry who served as chief credit officer to the government-backed mortgage company Fannie Mae in the late 1980s.

A White House spokeswoman, Jennifer R. Psaki, said the administration would continue to refine the program as needed. “We will not be satisfied until more program participants are transitioning from trial to permanent modifications,” she said.

Capitol Hill aides in regular contact with senior Treasury officials say a consensus has emerged inside the department that the program has proved inadequate, necessitating a new approach. But discussions have yet to reach the point of mapping out new options, the aides say.

“People who work on this on a day-to-day basis are vested enough in it that they think there’s a need to do a course correction rather than a wholesale rethink,” said a Senate Democratic aide, who spoke on the condition he not be named for fear of angering the administration. “But at senior levels, where people are looking at this and thinking ‘Good God,’ there’s a sense that we need to think about doing something more.”

Mr. Barr, who supervises the program, portrayed such deliberations as part of a constant process of assessment within the Treasury. He expressed confidence that the mortgage program had sufficient tools to deliver relief, characterizing the slow pace as reflecting a lack of follow-through, and not structural defects requiring a revamping.

Do these people live in the real world? Lack of follow through on the program? The legislation doesn't need a revamping? These people are so out of touch with reality it's sickening.

“We’re seeing a failure by some of the bigger banks on execution,” Mr. Barr said. “We’re going to be quite focused and direct on particular institutions that are not doing a good job.”

The banks say they are making good-faith efforts to comply with the program and provide relief.

My ass.

“We’ve poured resources into this,” said a spokesman for JPMorgan Chase, Tom Kelly. “We’ve made dramatic improvements, and we continue to try to get better.”

Some senators contend that the Treasury program, addressing mortgages whose low promotional interest rates had soared, is outmoded.(Duh) At this point, foreclosures are being propelled by joblessness,(Duh) which is sending millions of previously credit-worthy people with ordinary mortgages into delinquency.

Within the Senate, some discussion now focuses on pursuing legislation that would create a national foreclosure prevention program modeled on one started last year in Philadelphia. That program forces mortgage companies to submit to court-supervised mediation with delinquent borrowers aimed at striking an equitable resolution before they are allowed to proceed with the sale of foreclosed homes.

Go get 'em Philly. Rock it out.

Some Democrats say the time has come to reconsider a measure opposed by the Obama administration: giving bankruptcy judges the right to amend mortgages as a means of pressuring lenders to extend reductions.

Lawyers who defend homeowners against foreclosure increasingly say they doubt the Treasury program can be made effective. Under the plan, companies that agree to lower payments for troubled borrowers collect $1,000 from the government, followed by another $1,000 a year for up to three years. The program is premised on the idea that a small cash incentive will induce the banks to cut their losses and accept smaller payments.

But the mortgage companies that collect payments from homeowners — servicers, as they are known — generally do not own the loans. Rather, they collect fees from investors that actually own mortgages, and their fees often increase the longer a borrower remains in delinquency.

Under the Treasury program, borrowers who receive loan modifications must make their new payments on a trial basis and then submit new paperwork validating their income to make their modifications permanent.

But borrowers and their lawyers report that much of the required paperwork is being lost in a haze of bureaucratic disorganization. Servicers are abruptly changing fax numbers and mislaying files — the same issues that have plagued the program from its inception.

“People continue to get lost in the phone tree hell,” said Diane E. Thompson, a lawyer with the National Consumer Law Center.

Some lawyers who defend homeowners against foreclosure assert that mortgage companies are merely stalling, using trial loan modifications as an opportunity to extract a few more dollars from borrowers who would otherwise make no payments.

“I don’t think they ever intended to do permanent loan modifications,” said Margery Golant, a Florida lawyer who previously worked for a major mortgage company, Ocwen Financial. “It’s a shell game that they’re playing.”

Shell game indeed...

On The Come Up, Garden Edition

I was waiting for the bus last week and happened to look over towards the community garden and saw new structures on the property.

Now that the leaves are off the trees you can easily see the garden from Stony Island.

Naturally, I trotted over there a few days later and this is what I saw:







We now have a new pergola that will be catching rain water for collection in one of several barrels AND provide shade.

As you can see, they kept the old one. It's just in another part of the garden.

There is also a new sturdily constructed storage shed.



You know it's quality when you see the nice Amish people hammering away.

Out of all of the odd sights I've seen on the south side, none was odder than the Amish rolling through the 'hood.

Perhaps other business people will take note. The Amish will go anywhere they can make money. They don't judge a neighborhood by marketing and sales projections and put out a quality product.

Plus I've been angling to get one of those white caps for my hair when I garden.

Nonetheless, the garden looks even better, cleanup day is tomorrow AND I hear that we're getting a new fence in the spring.

Now if we could only get rid of those flipping Japanesse beatles.

For Real?

So rumor has it that the our economy is coming out of this recession.

You can't tell that from where I'm sitting.


The north east corner of Marquette and Blackstone Avenue. The property was just boarded up in the last few days but has sat vacant and untouched for well over two years.


A close up of the sign that the bank posted.

Solutions

Money is tight these days.

But I'm sure you figured that out as I'm unemployed.

As a result, the personal grooming budget had to be sacrificed.

It's not like was going out for facials, massages and seaweed wraps when I had a job but I tried to get my nails and hair done with some regularity.

You know, the basics.

Money hasn't been the only culprit, I've simply lacked the will to get off my ass and groom myself.

It's like a never ending downward spiral. You don't go anywhere so you don't get dressed. You don't get dressed so you stay in your PJ's all day. You stay in your PJ's all day so you don't comb your hair.

You know where I'm going with this.

But yesterday, I decided that I had to break the cycle. I couldn't look like a bag of ass anymore.

Yet how could I make the magic happen without breaking the bank?

The solution: Cosmetology schools.

For $5.00 plus a small tip, I was able to get the eyebrows tamed and a pretty good manicure.

So I feel better, look better and didn't spend a great deal of money.

Thanks, Truman Cosmetology Salon, I needed that.

On The Come Up

Since I rarely drive I may have missed the fact that the 63rd and the Dan Ryan had both inbound and outbound exit ramps.

Nonetheless the south bound exit coming from the city seems new to me.

Now I'm hoping the construction is sound and nothing falls apart, but can you believe this landscaping?



Yes ladies and gentlemen, this is 63rd and Wentworth.

But I'm sure you could tell that by the grattiesque auto parts sign in the background of this picture. Prettying up the urban landscape won't happen overnight.

Normally the ramp medians would be choked with weeds and trash.

This looks like something you'd see on the north side.

We're on the come up.

Anniversary

Eight years ago yesterday, I closed on my current home and began my adventures on the south side.

If they (and I)knew what they (and I) know now.

A toast to beautiful Woodlawn and the wonders she holds.

We Were Warned....

The O'Jays tried to tell us, but we weren't listening.

Capitalism

It was with some interest that I finally got around to seeing Michael Moore's latest offering "Capitalism, A Love Story."

I didn't realize that my own private little unemployment and mortgage hell had been translated to the big screen.

So much for that book deal and movie options.

Say what you will about Mr. Moore, but I can tell you with absolute clarity that I'm living a vast majority of that story right now.

On it's face that may seem depressing, but there are a number of things that let me know I wasn't the only one to notice that things were amiss.

Mr. Moore also called attention to those who foresaw the subprime mortgage fallout. He also pointed out that the TARP bailout was passed on the second go round despite the fact it was voted down the first time.

Make no mistake friends---This whole TARP thing sounded extra bootleg the minute it was announced.

It's nice to know I'm not crazy. I wasn't being paranoid.

So the question remains---what's next?

What happens when people's severance or savings disappears and they find out that the safety net that was so generously extended for corporate America isn't large enough for "average" American?

Ladies and gentlemen if you didn't read it when I wrote it the first time, understand it now: We're screwed.

I'm just curious about the course of action the rest of my fellow Americans are going to take when they wake up and smell the coffee.

This may not be pretty.

Mortgage Epilogue, Part I

On it's face my mortgage situation has been worked out---at least temporarily.

When I didn't know what would happen, I contacted the press about my situation to see if a little well needed publicity would help the matter.

While I spoke with various members of the press, this is the only story to emerge so far.

Much thanks to Ashley Gross and the lovely folks over at Chicago Public Radio.