It Is High Time The Various Measures Reduce Impact of Foreclosures

Many plans have been launched but nothing is visible. Recession continues. But it is high time that the various measures reduce the impact of foreclosures – for all to see and feel.

In a latest move the authorities are putting demands of Financial Accounting Standard Board for suspension of mark-to-market accounting. This means banks will not be required to account for the real value of the assets as laid down in their books but instead they can claim that their worth is whatever is being paid for them. This will have double result – reduce transparency and increase self-delusion. It is like gorging on food for months but refusing to stand on a scale and think that no one will know that weight has been gained. None will be fooled. By shouting at Americans to be confident the opposite effect is taking place – they are terrified.

Since it is the taxpayer’s money that is going to be spent it does not make sense to focus on the failed bodies at the top of the financial ladder but more on those individuals at the base. Instead of purchasing soured assets and placing guarantees on deals that should never have been contracted, the money should be used to repair the broken and torn safety net of rational people who have not done anything wrong. The bailout project should be changed from saving banks to saving house owners.

The first priority is focusing on falling value of houses and incoming flood of foreclosures. Many see no meaning in continuing with a mortgage when the value of the house has become less than the loan amount. Nearly 20 million families are mulling over the question – should they continue or turn in the keys? In responding to this problem Congress has created a measure under the aegis of FHA to issue fresh government loans based on the prevailing value of the houses.

But this programme named Hope Now is not taking off thanks to the influence Wall Street holds on the politicians. Banks do not want to grant new loans by recognizing immediate losses. Instead they want to “work with borrowers” modifications of loans and other payment plans that require less accounting. Thereby the problem is kept alive by extending it. It seems interested lobbies have inserted a new clause that to qualify for such loans the borrowers has to repay all the loans taken on the equity of the house. Thus only a negligible number of loans will be granted under this head.

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• Bankruptcy can be a Breather for Foreclosure Victims
• The Feds Take Measures to Allow Free Credit Flow to Prevent Further Foreclosures
• More Banks Fail as Foreclosures Succeed in Holding Sway
• There Is a Mystery Surrounding the Bailout Money Meant For Foreclosure Prevention
• Many Charitable Foundations Are Coming Forward with Help in these Foreclosure Days