Banks Under Pressure to Ease Terms on Second Lien Home Loans
B of A, Citigroup, JPMorgan Chase, and Wells Fargo targeted in letter from Barney Frank, Chairman of the U.S. House of Representatives Committee on Financial Services.
Palm Coast, FL – March 8, 2010 – Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo are the targets of a March 5th letter from Barney Frank, Chairman of the U.S. House of Representatives Committee on Financial Services. The letter addresses the unwillingness of second lien holders to write down their mortgages. Clearly, if someone is upside down on their first mortgage, the second mortgage has lost its value. However, holders of home equity and other second lien mortgages remain unwilling to take their losses, a move that would clear the way for first lien mortgage holders to negotiate mortgage modifications with distressed homeowners.
Read: Rep. Barney Frank’s letter to banks (pdf)
Toby’s Commentary: Barney Frank and the Federal Government’s insistence in making increased home ownership a priority contributed to the explosion in sub-prime lending. Frank’s cozy relationship with Freddie Mac and Fannie Mae is well documented. Disingenuous as his letter seems in light of his past actions, it is the right thing to do. Full recovery cannot be achieved until the flood of distressed property is dealt with and until banks start lending again.
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Barney is a bozo, but…
…the issue with seconds is a huge problem and the banks just have their collective heads squarely stuck in the sand on it.
If you find yourself with a few minutes to spare read through the comments section of this Well/Wachovia "blog" — it will give you a solid picture of "ral life" out there.
https://blog.wellsfargo.com/wachovia/2009/08/a_hamp_loan_modification_updat.html
Dishonesty
The only thing that contributed, in my opinion, to the sub-prime lending debacle was dishonesty practiced by the professionals who were in a position of trust in the financial chain.If all had done their job in a trustworthy manner as expected we would never have experienced this disaster.