UNDERNEWS

Undernews is the online report of the Progressive Review, edited by Sam Smith, who covered Washington during all or part of one quarter of America's presidencies and edited alternative journals since 1964. The Review has been on the web since 1995. See main page for full contents

July 16, 2009

AS GOLDMAN SACHS & JP MORGAN SOAR, SO DO FORECLOSURES

Progressive Review - The remarkable discrepancy between the effects of national recovery policy on the big banks and on small homeowners was illustrated again by the latest report from Realty Trac: Foreclosures up 15% in the first six months of the year. Some 1.5 million homes were hit during this period, one out of every 380 homes in June alone.

Top ten states for foreclosures: Nevada, Arizona, Flordia, California, Utah, Georgia, Michigan, Illinois, Idaho, Colorado.

Obama's $50 billion plan to provide incentives to financial institutions to adjust mortgages appears to be bombing. Only 130,000 borrower are currently enrolled. One complaint - like so many of the administration's grand plans - is that it's too complex.

Congress rejected legislation by Senator Durbin to allow bankruptcy judges to change the terms of mortgages and the White House didn't lift a finger to save it. Writes the Washington Independent, "Mark Zandi, economist at Moody’s Economy.com, along with the Center for Responsible Lending, issued a report finding that the Durbin amendment would prevent nearly 1.7 million foreclosures - not because 1.7 million homeowners would file for bankruptcy, but because lenders and servicers would be more likely to reduce the terms of mortgage loans voluntarily if threatened with the possibility that a judge might do it instead."

During the New Deal, foreclosure adjustments were devolved to local judges.

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