Obama May Ban Foreclosures, Further Decrees to Follow

Look, I’m not a card carrying member of the Tea Party and I’m not an uber-conservative, but who the Hell does Obama think he is? When did we mutate from a country of laws to one driven by government fiat.

OK, I’m overreacting to this story. It’s from Bloomberg and it goes like this:

The Obama administration may expand efforts to ease the housing crisis by banning allforeclosures on home loans unless they have been screened and rejected by the government’s Home Affordable Modification Program.

The proposal, reviewed by lenders last week on a White House conference call, “prohibits referral to foreclosure until borrower is evaluated and found ineligible for HAMP or reasonable contact efforts have failed,” according to a Treasury Department document outlining the plan.

“It is one of the many ideas under consideration in the administration’s ongoing housing stabilization efforts,” Treasury spokeswoman Meg Reilly said in an e-mail. “This proposal has not been approved and there are no immediate planned announcements on the issue.”

She confirmed the authenticity of the document, which hasn’t been made public.

Somewhere in the not to distant past, when someone defaulted on a loan extended from one private party to another, the holder of the security interest had the option of taking back the collateral in the event of default. Now, without benefit of any enabling legislation, let alone judicial review the current administration has evidently assumed that it has some regal right to dictate the terms under which those contracts can be enforced.

Yes, there is a housing crisis in this country and lots of people are going to lose their homes. And, yes, there is an appropriate role for the federal government acting in conjunction with the owners of those mortgages. An absolutely laissez-faire approach to the problem is most likely not the best approach. Nevertheless, any alteration in the manner in which security rights are exercised should be subject to negotiation and agreement among all of the parties. Dictats have never had a place in American society and it’s most untasteful to see them emanating from this administration.

Absent any credible solution to the housing crisis and suddenly politically vulnerable, the President and his staffs’ jerking knees are troubling.

About Tom Lindmark 401 Articles

I’m not sure that credentials mean much when it comes to writing about things but people seem to want to see them, so briefly here are mine. I have an undergraduate degree in economics from an undistinguished Midwestern university and masters in international business from an equally undistinguished Southwestern University. I spent a number of years working for large banks lending to lots of different industries. For the past few years, I’ve been engaged in real estate finance – primarily for commercial projects. Like a lot of other finance guys, I’m looking for a job at this point in time.

Given all of that, I suggest that you take what I write with the appropriate grain of salt. I try and figure out what’s behind the news but suspect that I’m often delusional. Nevertheless, I keep throwing things out there and occasionally it sticks. I do read the comments that readers leave and to the extent I can reply to them. I also reply to all emails so feel free to contact me if you want to discuss something at more length. Oh, I also have a very thick skin, so if you disagree feel free to say so.

Enjoy what I write and let me know when I’m off base – I probably won’t agree with you but don’t be shy.

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