Lenders Avoid Redoing Loans, Fed Concludes

Lenders Avoid Redoing Loans, Fed Concludes

www.boston.com

Mortgage lenders don’t try to rework most home loans held by borrowers facing foreclosure because it would probably mean losing money, a study released yesterday by the Federal Reserve Bank of Boston concludes.

The Boston Fed’s findings suggest the Obama administration’s major effort to solve the foreclosure crisis by giving the lending industry $75 billion to rewrite delinquent loans to more affordable levels is not likely to work.

(visit the link for the full news article)

Hmmm!

Like people didn't see this happening already!

It started just as soon as the banks received this "bailout" money to help people from being foreclosed on and these "bankers" started buying other banks, going on "vacations" to resorts, remodeling their offices, giving themselves a pat on the back with HUGE bonuses, etc., etc.!

The Fed’s study found that only 3 percent of seriously delinquent borrowers - those more than 60 days behind - had their loans modified to lower monthly payments; about 5.5 percent received loan modifications that did not result in lower payments.

Many people thought it would have been a better idea to give "the people" the money to stimulate the economy, for the money to "Trickle Up", but "the people" don't have LOBBYISTS" in Washington telling them that "Trickle Down economics works better!

www.boston.com
(visit the link for the full news article)

[edit on 7/8/2009 by Keyhole]

And what did the Federal Reserve Bank of Boston's report have to say, ...

Lenders avoid redoing loans, Fed concludes

Mortgage lenders don’t try to rework most home loans held by borrowers facing foreclosure because it would probably mean losing money, a study released yesterday by the Federal Reserve Bank of Boston concludes.
******SKIP******
“Loan modification is not profitable for lenders,’’ Willen said. “If it were profitable, they would go out and hire staff.’’

US Representative Barney Frank, head of the House Financial Services Committee, said the study results may provide answers about why so few struggling homeowners have been able to get help.

So, what they are saying is that the banks/mortgage companies willingly took this "bailout money" to help "rework/modify" the loans for homeowners that were threatened with foreclosure knowing full well that they wouldn't use the money to help prevent these foreclosures because "modifying a loan is not profitable"!

Isn't there some kind of law about taking/accepting money under false pretenses?

Especially government/taxpayers money!

[edit on 7/8/2009 by Keyhole]