Whether you are the type who thinks it is unfair that judges be allowed to modify someone’s mortgage to prevent foreclosure or not, most experts in the field will tell you that—like it or not–our current real estate mess is not likely to get repaired without courts being given the power to change the terms of a mortgage if lending institutions balk at doing so.
That’s the reality…deal with it, folks.
That said, President Obama has dropped the ball big time on this one. He was in favor of changing the bankruptcy laws when he was taking aim at Hillary to get the White House gig, and he even backed it publically once he got the job.
But last week, Obama showed his true colors–and the extent to which he will roll over and play dead to the banks–when he did and said nothing as a dozen Senate Democrats linked up with Senate Republicans and managed to kill the amendment that would have brought about the change needed to deal with the growing number of troubled motgages.
As a New York Times editorial says: ” …when the time came to stand up to the banking lobbies and cajole yes votes from reluctant senators, the White House didn’t. When the measure failed, there wasn’t even a statement of regret.”
Some argue, wrongly, that the banks and other lending institutions will gladly step up to the plate and deal effectively with this problem on their own without government intervention. Those who think this are…how should I put this diplomatically?—-fools!
The track record for banks and other lenders doing this to mitigate foreclosures is dismal.
In March alone, the number of foreclosure filings may have been as high as 341,000, estimates the NYT.
Bankruptcy reform is needed if the real estate market is to have a chance of true recovery. You can wish it weren’t so, but, think about it, did you ever really get that wish you made to the tooth fairy when you were five? Bet not. (Unless your parent cheated, of course.) Or, were bankers!!!