New Orleans From the day the latest foreclosure modification plan as announced several weeks ago, and it became clear that banks saw their participation as voluntary, I said this was not going to work. The government orchestrated immediate acceptance by their subsidiaries, Citi and Bank of America, but as surely as I predicted that was just the spin. In hearings before Barney Frank’s House Financial Services Committee yesterday executives from ungrateful, anti-family institutions, JP Morgan Chase and Wells Fargo, earned their pay walking the plank to whisper that “on, no, not me, bro!” when asked to endorse a broad – and necessary – program of principal reductions to keep homeowners from losing their homes.
This would be simply more bad news for the millions of owners who are taking water trying to stave off foreclosure and the other millions who are already under water on the value of the home, if it had not been so predictable that most probably didn’t expect much from this program anyway. Remember the details of the program were also crafted so narrowly that rich people would already be in heaven before a working man could crawl through the eye of the needle to get foreclosure relief. In fact I take that back, since in the last Obama modification program you had to prove that you were not in fact a working man, but could show a valid unemployment debit card.
When are the White House and Congress going to finally stop playing footsie with these formally chattel banking houses who so recently were cashing government checks for billions? I’ve said it ad infinitum ad nauseum: the banks have no interest whatsoever in right sizing their balance sheets to reflect the real values of their underlying mortgages as opposed to the pre-recession value statements on their books. There will never be any such thing as an “all volunteer army” of bankers about anything, unless it’s looting and pillaging, I suppose. Remember Jamie Damon, CEO of Morgan/Chase was short months ago being seen as the go-to advisor to the President on financial issues, so why can’t President Obama put the hard hurt on Chicago buddy Jamie?
The government needs to impose a mandatory program. If Wall Street footsie friends like Treasury Secretary Geithner cannot bring themselves to do it, then he ought to move across the street and draw his check from the banks rather than the taxpayers. This is ridiculous and since it affects almost 20,000,000 homeowners in one way or another, it’s too big a problem to ignore. For those underwater, it’s still walkaway time. There’s still no calvary coming.