Administration Shifts Focus on Foreclosure-Gate
As I suspected would happen, the Obama administration is changing the foreclosure conversation.
With the announcements from Bank of Americaand GMACthat they have not found any major paperwork flaws and are resuming foreclosure sales next week, the threat of a nationwide foreclosure moratorium seems to be abating.
Granted, the administration never did call for that moratorium, and were actually pretty darned quiet throughout the past few weeks, but they did throw around a little tough language about investigating the banks and holding them accountable for any form of fraud. Then, on Sunday, the game began to change.
In a Huffington Post post, HUD secretary Shaun Donovanbegan shifting the conversation back to the housing market, ever so-slightly, tucking it in while still calling some foreclosure practices, "shameful." Then yesterday we were informed of an "Administration-wide meeting with key federal agencies and regulators regarding the ongoing foreclosure processing issue." Closed to press of course. The HUD Secretary, Treasury Secretary, folks from Justice and other top regulators are confabbing this morning, to what end, I really don't know.
As a precursor, Secretary Donovan took to our air this morningand made a rather bold statement: "We are not finding any evidence of underlying structural issues that would make [mortgage] securitizations suspect or otherwise." He stressed that banks need to be held accountable for any paperwork issues, but then he launched into his real message.
"Where we haven't found issues, we need to make sure that homeowners that are sitting in limbo right now, waiting to buy homes, neighbors who are seeing houses sit vacant in their communities, that we move forward."
Okay, so let's get on with the housing recovery, which was obviously set back a bit by the foreclosure scandal. Oh, and let's not forget, it's not just about getting foreclosures back up for sale, it's about going back to strong-arming those loan modifications, which, dare I say, the Administration hasn't been too successful at to date."
"I think the real issue that we're focused on," notes Donovan, "are banks doing what they are required to do by FHA and what they should be doing to keep people in their homes." He used the words "recovery" and "confidence" several times in the interview, two things sorely lacking in today's housing market and somehow forgotten in all the talk of robo-signers and multi-bajillion dollar mortgage put-backs.
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