Mortgage Brokers Still Run Amok Three Years After Market Meltdown

•November 9, 2011 • Leave a Comment

by Neil Roland via The Street

Mortgage brokers, many of whom originated deceptive loans that helped trigger the 2008 financial crisis, are still supervised by a dysfunctional patchwork of state and federal regulators.

A federal lawsuit against a leading mortgage broker last week exposed a gaping regulatory hole that will persist as long as Senate Republicans block appointment of a chief for the new consumer agency.

The U.S. Consumer Financial Protection Bureau created by the Dodd-Frank legislation can’t examine or supervise mortgage brokers until it gets a director confirmed by the Senate. Former Ohio Attorney General Richard Cordray was nominated in July, but a Senate vote has not yet been scheduled.

Senate Republicans headed by their leader, Mitch McConnell of Kentucky, and Richard Shelby of Alabama are playing Russian roulette with borrowers’ homes and assets by threatening to block Cordray’s nomination. If he were to be confirmed, the consumer agency would likely have the focus and independence to prevent a massive decade-long fraud like that allegedly conducted by Allied Home Mortgage Capital Corp.

"These crises can be averted," said William Black, an economics and law professor at the University of Missouri in Kansas City who was a senior thrift regulator in the 1980s. "But if you create regulatory black holes, mortgage brokers will just move to areas where regulation is weakest."

The hazards of the status quo were highlighted by the federal civil-fraud complaint last week against Allied, which billed itself as the nation’s largest privately held mortgage broker.

The allegations, if true, show how a determined broker can easily sidestep disengaged and unconnected regulators. Since 2003, three federal agencies and more than a dozen states cited or settled with Allied or a related company for misconduct, according to a 2010ProPublica story. Yet Allied chugged along. Thousands of other mortgage brokers committed similar deception about loans they were peddling in the run-up to the financial meltdown.

In 2005, many of the $1 trillion in nonprime loans were handled by mortgage brokers, who were paid by lenders to prepare loan paperwork for borrowers, according to the Financial Crisis Inquiry Commission report.

Many of the 200,000 new brokers who began their jobs during the subprime boom had criminal records, the January report said.

It cited a Miami Herald story that said more than 10,000 brokers with criminal records entered the field in Florida between 2000 and 2007, 40% of whom had been convicted of crimes such as fraud, bank robbery, racketeering or extortion.

"Lack of accountability created a condition in which fraud flourished," Marc Savitt, former National Association of Mortgage Brokers president, told the commission.

The regulatory structure at the time, which remains in place to this day, consists largely of the states and the Federal Trade Commission, whose varied missions include consumer protection. Brokers that originate mortgages backed by the Federal Housing Administration also are monitored by that agency.

The problem with FHA oversight, as the Allied case shows, is that it relies on supervision by federal computers that are easily evaded.

No boots are on the ground in the form of federal examiners, nor is there any umbrella coordination of state efforts. The CFPB, which began operating in July, is the only government agency in the United States with the dedicated mission of protecting consumers in the financial marketplace.

"I believe that a fully functioning CFPB would be more likely to identify and prevent serious violations of law by mortgage brokers and nonbank lenders," George Washington University law professor Arthur Wilmarth said.

Without a director, CFPB can examine the 100 or so banks with assets of more than $10 billion, and has begun doing so. The agency also has asked state regulators to share information about enforcement actions taken to protect consumers against mortgage abuses.

But it can’t oversee nonbank providers such as mortgage brokers and servicers, payday lenders and debt collectors. The federal suit last week alleged Houston-based Allied cost the FHA at least $834 million in insurance claims on defaulted home loans.

The broker engaged in "reckless mortgage lending" in originating 112,324 FHA-backed loans, most to low- and middle-income borrowers, from 2001 to 2010, the complaint contended. About a third of those loans defaulted, leaving thousands of homeowners facing eviction.

Allied, headed by Jim Hodge, who also was sued, did not reply to requests seeking comment. The broker successfully evaded housing regulators through a series of maneuvers, prosecutors alleged.

When an Allied branch office approached unacceptably high default rates, the company made a subtle change to the office address to fool FHA computers and ostensibly create a new branch with a blank default slate.

All the broker had to do to hoodwink the government was change "Street" in the address to "St.," or add a suite number, the suit alleged.

When the FHA upgraded its system to prevent such manipulation, Allied simply switched ownership of its branches to a successor entity with a slightly different name.

And in 2006, when the FHA barred a North Carolina branch of Allied from originating loans, the broker said the mortgages were from a different branch with a cleaner slate, according to the suit.

In Congress, the Republican charge is being led in part by Shelby, by far the leading 2010 recipient of campaign contributions from finance and credit companies, according to the non-partisan Center for Responsive Politics. Shelby, the top Republican on the banking committee, and 43 other Senate Republicans sent a May letter to President Obama calling for revisions in the Dodd-Frank law.

Their letter called for "accountability" for the consumer agency — oddly, the same concept said to be lacking for mortgage brokers during the subprime boom.

The Republicans threatened to block the appointment of any agency director unless CFPB was headed by a bipartisan board rather than a single director. The agency also should be funded by Congress rather than through the self-supported Federal Reserve, they said.

Under Senate rules, it would take 60 votes to halt the filibuster threatened by the 44 Republicans. The White House has not disclosed its plans nor whether it is holding any back-room talks with Senate Republicans.

But this is a clear-cut issue — the protection of consumers against the potential greed of mortgage brokers — on which the president should stand tall.

 

 

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The Five Star Institute Announces Top Women in the Mortgage and Housing Industry Banquet

•November 9, 2011 • Leave a Comment

Mortgage Group Will Honor Industry Trailblazers at the 2011 MPact Conference and Expo

via Five Star Institute

The Five Star Institute, a mortgage industry group, announced today that it plans to honor several distinguished women in mortgage and the housing industry at the 2011 MPact Conference and Expo, held Dec. 4-6, 2011.

MPact will feature the honorees at the 2011 Top Women in the Mortgage and Housing Industry Banquet immediately before former U.S. Secretary of State Condoleezza Rice delivers her keynote address.

The Five Star Institute developed a list of several criteria to assess and determine final candidates for the banquet. The criteria included industry impact, "Big Picture" thinking, name brand equity and reputation, and a record of accomplishment with other companies.

The Five Star Institute is pleased to announce the following final honorees:

  • Caren Jacobs Castle, President, United States Foreclosure Network
  • Francene DePrez, CRP/SGMS, President, Fidelity Residential Solutions
  • Colleen Hernandez, President and CEO, Homeownership Preservation Foundation
  • Margaret M. Kelly, CEO, RE/MAX World Headquarters
  • Christine Larsen, COO of Trust and Securities Processing Division, JPMorgan Chase
  • Rebecca Mairone, National Mortgage Outreach Executive, Bank of America
  • Roseanna McGill, Chairman, PrimeLending
  • Frances Martinez Myers, President, Employee Transfer Corporation/ETCREO Management
  • Deb Still, President and CEO, Pulte Mortgage
  • Ivy Zelman, CEO, Zelman & Associates

"This select group of mortgage and housing industry leaders gives testimony to the strength of our democracy and exemplifies the importance of real leadership, above and beyond gender," says Ed Delgado, CEO of the Five Star Institute. "It is our great esteem and pleasure to recognize these trailblazers for their substantive and continuing contributions to our industry and markets at a time when we need strong leadership the most."

Additionally, the 2011 MPact Conference and Expo is focused on increasing the viability and success of mortgage industry professionals working in originations, servicing, data and analytics, and the secondary market.

 

 

 

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Credit Scores to Factor in More Consumer Data

•November 9, 2011 • Leave a Comment

Mary Ellen Podmolik via Los Angeles Times

Many consumers applying for a mortgage are going to start sharing more personal information with lenders next year, like it or not.

FICO scores, the industry standard for determining credit risk in mortgages backed by Fannie Mae, Freddie Mac and the Federal Housing Administration, largely have been based on a person’s credit history. But in an attempt to develop a more well-rounded picture of a person’s finances beyond credit, tools are being developed to help the lending industry dig deeper.

Fair Isaac Corp., or FICO, the company behind the widely used scoring formula, and data provider CoreLogic recently announced a collaboration that will result in a separate score that will be available to mortgage lenders and incorporates information that will include payday loans, evictions and child support payments. In the future, information on the status of utility, rent and cellphone payments may also be included.

Separately, the big three credit reporting companies — Experian, Equifax and TransUnion — recently began providing estimates of consumer income as a credit report option. And Experian this year began including data on on-time rental payments in its reports.

The new information could prove to be a double-edged sword for consumers: It may open the door to homeownership to some consumers who have, according to industry speak, a "thin file" or worse, a "no file," meaning that they lack sufficient credit histories.

On the other hand, the extra information may make a borderline borrower look even worse on paper. Also, it’s unlikely to quiet critics who complain that too much emphasis is put on a single number.

Still, there is thought among researchers that consumer transparency, if it demonstrates both good and bad behavior, has its place.

"You’re trying to convince someone to loan you an awful lot of money at a low interest rate," said Michael Turner, president of the Policy and Economic Research Council. "Only you know whether you’re going to pay it back. There is a harmony in this data exchange."

The FICO-CoreLogic partnership won’t result in a credit score that will rule out a borrower for a mortgage backed by Fannie Mae, Freddie Mac or the FHA, which together own or guarantee at least 90% of the mortgages being written. That’s because the report required for such a loan does not rely on CoreLogic data. However, it could affect mortgage fees or interest rates charged by lenders that in today’s lending environment have heartily adopted risk-based pricing.

"We’re fascinated to see, as we get into the data, whether that may expand the universe of people who can get a mortgage," said Joanne Gaskin, director of product management global scoring for FICO. "Banks are saying, ‘How do I find ways to safely increase loan volume, to find the gems out there?’"

As a result, there’s a rush by credit reporting firms to provide financial companies, including mortgage banks and credit card providers, with a wealth of information on individual customers.

"Before the [housing] bubble burst, there was a huge amount of interest in targeting the unbanked," said Brannan Johnston, an Experian vice president. "It was a desperate dash to try and grow and go after more and more consumers. When the bubble burst, that certainly dialed back some. They want to grow their business responsibly by taking good credit risks."

FICO scores have been around since the 1950s, but they didn’t become a major factor in mortgage lending until 1995, when Fannie Mae and Freddie Mac began recommending their use to help determine a mortgage borrower’s creditworthiness. The score, which ranges from 300 to 850, factors in how long borrowers have had credit, how they’re using it and repaying it, and whether they have any judgments or delinquencies logged against them.

The change comes as mortgage lenders reward the most creditworthy borrowers with low rates and tack extra fees onto loans for those with lower credit scores.

There are concerns about whether inquiries and charge-offs from payday and online lenders should be included in determining credit scores.

"Payday loans are extremely onerous," said Chi Chi Wu, a staff attorney at the National Consumer Law Center. "They trap people in a cycle of debt. To report on them is to cite that person as financially distressed. We certainly don’t think that’s going to help people with a credit score."

The extra information may also help more affluent homeowners who aren’t on the credit grid.

Two years ago, David Pendley, president of Avenue Mortgage Corp., worked with a college professor who didn’t believe in using credit. "He was putting down 40% and he had the hardest time getting a loan, even though he had $120,000 in the bank and he was 22 years on the job."

Eventually, Pendley secured a loan for the customer through a private bank, but he paid for it. "He didn’t get the lowest rate possible," Pendley recalled.

 

 

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Google Enters the Mortgage Loan Business

•November 8, 2011 • Leave a Comment

Business News Express via Melissa O’Neill

LoanSifter, Inc. (www.LoanSifter.com), provider of the mortgage industry’s most complete and intuitive product and real-time pricing platform, announced today a strategic relationship with Google Inc. that gives consumers access to mortgage loan products and real-time pricing based on LoanSifter’s technology, including side-by-side comparisons of mortgage loan products from multiple lenders through Google’s Comparison Ads.

Google’s Comparison Ads help consumers shop for mortgages online by retrieving quotes based on the borrower’s specific loan criteria.  Through a strategic relationship between both companies, Google will leverage LoanSifter’s industry-leading technology – which automates pricing for lenders using the largest real-time database of investor pricing and eligibility content available in the mortgage industry — to provide Google users with information on mortgage products and pricing from the lenders using LoanSifter.  When Google users get these rates, LoanSifter’s lenders will receive qualified online leads.

Greg Ulrich, production manager at Fairway Independent Mortgage Corporation in Colleyville, Texas, believes that Google’s popularity provides a great opportunity as another channel for borrowers to reach the company, without substantial investment costs.  ”This saves us money, allowing us to pass a greater savings to the consumer,” Ulrich said.

“We chose LoanSifter for our Google auto-quoting because it enables us to customize our pricing more accurately and effectively,” Ulrich added.  ”Other vendors require manual supervision, which would have been problematic in keeping up with market shifts.”

Consumers who search for popular mortgage-related terms or phrases on Google are drawn to Google’s proprietary mortgage Comparison Ads, where they can anonymously provide details such as their desired loan amounts and credit scores.  Google will then retrieve multiple reliable offers from dependable lenders, placed side-by-side so the borrower can compare them.  After investigating different scenarios and choosing a lender, the borrower is then able to contact the lender by phone or e-mail.  Borrowers do not have to fill out lengthy forms or click through walls of advertisements in order to access up-to-the-minute loan products and rates, and the leads generated to lenders are anonymous, so that borrowers can protect their private information until they are ready to move forward in the mortgage process.

“Our relationship with Google will be of tremendous benefit to both lenders and consumers,” LoanSifter President Bruce Backer said.  ”A growing number of borrowers are using the Internet to find the best possible mortgage deals, and Google’s immense popularity makes it a first stop for many.  Borrowers benefit from the side-by-side comparison in an open marketplace, while lenders benefit from LoanSifter’s ability to accurately price mortgage scenarios on their behalf.”

 

 

 

 

 

 

 

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Coester Warns On Lenders Not Being Ready for UCDP and UAD Deadlines

•November 1, 2011 • Leave a Comment

Brian Coester, Coester Appraisal Group

The Uniform Collateral Data Portal (UCDP) and Uniform Appraisal Dataset (UAD) deadlines are right around the corner and with the constant changes in appraisal regulations over the past years it’s easy to get lost in it all and just say ‘My Appraisal Management Company is taking care of this.’

The reality is — with these new UCDP and UAD changes, the updates are probably not being handled properly and you are probably not ready for the changes; changes that are taking effect December 1, 2011.

The UCDP is a part of Fannie Mae and Freddie Mac’s Loan Quality Initiative (LQI) that started these programs over two years ago under the Collateral Data Delivery (CDD) program. Brian Coester, CEO of Coester Appraisal Group, has been conducting presentations and educational seminars for local Mortgage Bankers Associations (MBAs) around the country. Coester expressed his shock at the lack of preparation by both Appraisal Management Companies (AMCs) and lenders. “We had six AMCs at our last MBA seminar and none of them had any idea about what was going on nor were they registered to handle the files for their clients. We’ve been preparing for this for more than a year and it’s shocking that a such a big change would go unnoticed or unaccounted for."

Coester also warns that lenders are still unprepared and a Wells Fargo correspondent rep at one of the UCDP seminars confirmed this. Coester states, "The reps have indicated their correspondents are just getting around to looking at this. The problem arises because the time it takes to register and get what you need set-up and done, is 7-10 business days. Now they are telling people 20 business days, which falls just before the December 1, 2011 transition date. If lenders don’t jump on this they may not be able to close loans or sell loans at all.” Fannie Mae and Freddie Mac require registering for the UCDP which most lenders have not yet completed. “They think they don’t have to register or aren’t going to be held responsible for this. Most of the feedback though, is that they their investor would be handling this; the reality is that’s not the case." says Brian Coester.

Coester is fully registered for the UCDP and will be handling the complete end-to-end delivery, review, and submission files for its clients. "With us it’s pretty simple: login to the UCDP portal, type in our name, add us a Lender Agent, and you’re done. Very few companies will be able to say that it was that easy for them and we are glad we can help our clients." says Brian Coester. Coester admits that he has been working on the project for over a year now.

About Coester Appraisal Group:

Coester Appraisal Group is a nationwide Appraisal Management Company specializing in high quality appraisal reports that comply with all industry guidelines and regulations. With its headquarters in Rockville, Maryland, Coester Appraisal Group was founded in 1970 as a local appraisal company but has since developed into a formidable force in the appraisal management segment. For more information, please visit Coester Appraisal Group online at http://www.CoesterAppraisals.com.

 

 

 

 

 

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Mortgage Lenders Could Soon Take Homes’ Energy Costs Into Account

•November 1, 2011 • Leave a Comment

Kenneth Harney via Washington Post

When you apply for a mortgage to buy a house, how often does the lender ask detailed questions about monthly energy costs or tell the appraiser to factor in the energy-efficiency features of the house when coming up with a value?

Hardly ever. That’s because the big three mortgage players — Fannie Mae, Freddie Mac and the Federal Housing Administration, who together account for more than 90 percent of all loan volume — typically don’t consider energy costs in underwriting. Yet utility bills can be larger annual cash drains than property taxes or insurance — key items in standard underwriting — and can seriously affect a family’s ability to afford a house.

A new, bipartisan effort on Capitol Hill could change all this dramatically and for the first time put energy costs and savings squarely into standard mortgage underwriting equations. A bill introduced Oct. 20 would force the big three mortgage agencies to take account of energy costs in every loan they insure, guarantee or buy. It would also require them to instruct appraisers to adjust their property valuations upward when accurate data on energy efficiency savings are available.

Titled the SAVE Act (Sensible Accounting to Value Energy), the bill is jointly sponsored by Sens. Michael Bennet (D-Colo.) and Johnny Isakson (R-Ga.). Here’s how it would work: Along with the traditional principal, interest, taxes and insurance (PITI) calculations, estimated energy-consumption expenses for the house would be included as a mandatory underwriting factor.

For most houses that have not undergone independent energy audits, loan officers would be required to pull data from either previous utility bills — in the case of refinancings — or from an Energy Department survey database to arrive at an estimated cost. This would then be factored into the debt-to-income ratios that lenders already use to determine whether a borrower can afford the monthly costs of the mortgage. Allowable ratios probably would be adjusted to account for the new energy/utilities component.

For houses with significant energy-efficiency improvements built in and documented with a professional audit, such as a home energy rating system study, lenders would instruct appraisers to calculate the net present value of monthly energy savings — i.e., what that stream of future savings is worth today in terms of market price — and adjust the final appraised value accordingly. This higher valuation, in turn, could be used to justify a higher mortgage amount.

For example, Kateri Callahan, president of the Alliance to Save Energy, a nonprofit advocacy group and a major supporter of the new legislation, estimates that a typical new home that is 30 percent more energy efficient than a similar-sized, average house will save about $20,000 in utility expenses over the life of a mortgage. Under the Bennet-Isakson bill, appraisers would be required to add those savings to the current market valuation of the house. In this instance, Callahan says, the increase in value would be about $10,000.

Dozens of housing, energy and environmental groups have endorsed the new legislation including appraisers, large home builders, the U.S. Chamber of Commerce, the U.S. Green Building Council, the Natural Resources Defense Council, green-designated real estate brokers, the Institute for Market Transformation and the National Association of State Energy Officials, among others.

Business groups such as the U.S. Chamber are backing the legislation because they see it as an employment generator that requires no federal budget outlays, no new taxes or programs. A joint study by the American Council for an Energy-Efficient Economy and the Institute for Market Transformation estimated that 83,000 new jobs in the construction, renovation and manufacturing industries could be stimulated by the legislation if the new underwriting rules were phased in over a period of years.

But not all interest groups are lining up behind the bill. The National Association of Realtors expressed concern that it might hamper a real estate recovery by complicating the mortgage process. “NAR supports efforts to promote energy-efficiency in housing and believes it’s something that all consumers should strive toward,” the group said. “However, we believe that homeowners should move toward energy efficiency at their own pace, without a mandate that impedes their ability to qualify for a mortgage or causes them to incur substantial additional costs to purchase a home, especially while the housing market continues to recover.”

Another group whose members and clients could be affected by the bill, the Mortgage Bankers Association, declined to comment for the record, saying it is still evaluating the bill’s provisions.

But one might ask: In a fractious, polarized Congress, could this bill actually make it through this session? The co-sponsors are optimistic and supporting groups say there is substantial bipartisan support — a rarity — for the idea in both the House and Senate.

In the meantime, for homeowners who think their energy-efficiency and cost-saving improvements should be worth something, there is no rule barring you from asking a qualified appraiser or a lender to assess the added market value of those features. You can get your house rated and documented and insist they do precisely that.

Or you can invest in documented improvements that save on utility expenses — a worthy goal in its own right — and hope that the federal agencies see the light and change their underwriting and valuation procedures before you go to sell. Sooner or later, this is going to happen.

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A Realistic Fix for the Mortgage Crisis

•November 1, 2011 • Leave a Comment

By Elyse Cherry via Los Angeles Times

President Obama recently announced that the federal government will take steps to reduce interest rates on mortgages for some existing homeowners. Unfortunately, that won’t help millions of U.S. homeowners already in foreclosure and millions more about to join them.

The current foreclosure crisis is not due to poor choices by individual homeowners. Most people caught up in it fell prey to a national bubble and bad lending practices. These taxpayers – schoolteachers and medical technicians, salesclerks and mechanics, veterans and parents of soldiers in Iraq and Afghanistan – are often simply people who got in over their heads. They deserve a second chance.

One reason the mortgage industry hasn’t done more, its leaders say, is that it fears creating a "moral hazard" – the concept being that if homeowners in default are given too much help, other homeowners might be tempted to deliberately default in order get the same help. That hasn’t been the experience of Boston Community Capital, a 27-year-old nonprofit, community development finance institution I’ve led for 14 years.

As part of its Stabilizing Urban Neighborhoods initiative, Boston Community Capital has renegotiated many mortgages on foreclosed homes, and we’ve seen no evidence that doing so sets off a flood of voluntary defaults. We believe our model could be applied much more widely in this national crisis.

Foreclosure isn’t something a homeowner chooses if it can be avoided. Today, a good credit score is required for countless transactions, and foreclosure destroys a person’s credit score. In many states foreclosed homeowners can’t qualify for another mortgage for many years, nor can they easily rent houses, qualify for college and car loans, or even get some jobs.

Since 2009, Stabilizing Urban Neighborhoods has prevented the eviction of almost 150 Massachusetts households by securing reduced mortgage payments that line up with homeowners’ real incomes – rather than with the value set by a real estate bubble that burst long ago.

Our formula is straightforward. We negotiate with the lender’s representative to buy foreclosed homes at current, distressed market values – often 50 percent less than the amount paid by the homeowner. We then resell the homes to their current occupants with a new 30-year mortgage at a fixed interest rate of 6.375 percent (a rate that, although higher than the best loans available to people with excellent credit, is far lower than the rate that the high-risk clients we assist could get elsewhere – if they could get other loans at all).

We qualify our clients by closely analyzing their finances and employment situations. We work with local nonprofits to understand client histories. Even after accounting for reserves, emergency repairs and closing expenses, we are able to lower monthly housing expenses and the overall cost of a home loan to affordable levels. On average, homeowners pay about 40 percent less per month.

We require homeowners to share any future potential appreciation with our neighborhood nonprofit if the market rebounds, discouraging speculators and people who aren’t serious about keeping their homes from coming to us.

Our initiative cannot solve every foreclosure problem. Some would-be participants don’t have enough income to sustain even a sharply reduced mortgage payment. Some in the mortgage industry, citing moral hazard, refuse to sell us homes at their current values because we plan to keep foreclosed homeowners in the homes. At times, we have been outbid for a home we were trying to save, but we won’t spend more on a home if that would mean we would have to offer our borrowers new mortgages that were still too high for them to manage.

Our Stabilizing Urban Neighborhoods initiative is not a bailout or a charity. It is a sustainable model that can offer relief to a substantial percentage of homeowners in foreclosure and relieve mortgage industry gridlock. The Open Society Foundations and others have provided us planning funds to explore other locations across the country where our model might work. The approach is best suited to areas that have suffered substantial depreciation in housing prices, that have high levels of foreclosures, and that have trusted, long-standing community organizations interested in entering partnerships to administer the program. We estimate that our approach could help 1 in 5 homeowners whose homes have significantly dropped in market price, and who are either late in paying their mortgages or in foreclosure.

Renegotiating realistic mortgages that keep people in their homes helps homeowners and neighborhoods. It also helps the mortgage industry, which must come to grips with the fact that many of its borrowers can’t afford to continue to make payments on mortgages that were entered into during the bubble. Our strategy could work on a far grander scale – the kind of scale that, say, Bank of America, Citigroup, HSBC or Wells Fargo or others could adopt.

Foreclosure and eviction are lengthy and expensive. As more homes become owned by lenders, those institutions will bear increasing responsibility for paying local property taxes, insurance and maintenance costs, as well as steep fines if they fail to comply with local building codes and city ordinances.

The groundless fear that helping some borrowers will lead to an avalanche of new foreclosures has discouraged sensible and systemic solutions to the foreclosure crisis. Allowing the mortgage industry to hide behind this fiction has created a genuine hazard – to neighborhoods, to communities and to the nation’s economic health.

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