WSJ: Bankers Trash Obama’s New Mortgage Program

[bobbyw24]

President Barack Obama is developing a new program to help homeowners having trouble paying their mortgage loans. But the banking industry doesn’t like it, The Wall Street Journal reports.

The plan makes banks pay a fine for mortgage-servicing errors or ease the terms of mortgage loans. Bankers haven’t seen the text yet, but they’re upset with the new approach.

Bankers don’t believe reductions in the principal of loans will do much for homeowners or the housing market in general.


President Barack Obama Obama's proposal "would bring with it enormous costs that would far outweigh any potential benefits," Chris Flanagan, a Bank of America mortgage strategist, said in a research note Thursday, according to the Journal.


http://www.moneynews.com/StreetTalk/Bankers-Trash-Obama-New/2011/02/25/id/387426

[eduardo89]

Great, a new program to skew the market and help people stay crushed by the debt burden of a mortgage they never should have gotten in the first place

[bobbyw24]

Great, a new program to skew the market and help people stay crushed by the debt burden of a mortgage they never should have gotten in the first place

Ja, das stimmt

[MozoVote]

The laws of unintended consequences are also playing out with the Dodd-Frank bill.

Now that mortgage originators cannot be compensated based on the types of products they sell - it will chill interest in working with credit challenged borrowers who need FHA or Low-Income assistance. These types of loans take more effort to complete, and they are for smaller amounts (hence lower commissions). But the borrowers are going to generally be the urban poor that voted for Obama and the Dems.

[bobbyw24]

Yeo Obamas budget cuts FHA new loan funding by 41%

[Doug8796]

Should I be happy or sad bankers are mad at obama :P