Understanding Government

Four years after the housing bubble burst, all levels of government are getting their bearings in addressing the foreclosure crisis. A mix of programs are either being started or revived that might actually address specific payment problems homeowners face.

Illinois announced on Friday that it will use $100 million in federal money to start a Mortgage Resolution Fund, where a public-private partnership will buy “underwater mortgages” — those where delinquent payments are worth more than the mortgage itself — from homeowners in the Chicago area. (more…)

Few politicians are as polarizing as Minnesota U.S. Rep. Michelle Bachmann. So it’s no surprise that Democrats are going after her vote to defund TARP’s Home Affordable Modification Program, reports Andy Birkey of the Minnesota Independent. But Bachmann is doing nothing different than her Republican colleagues who already voted to terminate a Federal Housing Administration foreclosure prevention measure and who have spoken in favor of eliminating all such Obama programs.

Another thing:  Bachmann has a point. Even progressives readily admit that HAMP is a failure that has yet to gain momentum. Democrats who support of foreclosure prevention programs should propose an alternative plan of action than defend the current menu of policies.

Gretchen Morgenson of the New York Times brings a cohesive and pointed review of the Financial Crisis Inquiry Commission’s report issued last week (number 46 today on Amazon’s best-seller list).  Not to depress you on a Monday morning, but Morgenson says the 576-page behemoth

makes for compelling reading because so little has changed as a result of the debacle, in both banking and its regulation.

She’s alarmed that the Federal Reserve, “defiantly inert and uninterested in reining in the mortgage mania,” now has even more power to regulate banks and their often-risky practices.  (more…)

In the same week that Cook County Sheriff Tom Dart put a freeze on Chicago region foreclosure evictions, new data shows that Chicago’s foreclosure crisis is worse than ever. The Chicago Tribune’s Mary Ellen Podmolik relays a Woodstock Institute study that there was a 44.9 percent increase in completed foreclosures in the Chicago region between the 3rd quarter of 2009 and 3rd quarter of 2010. In the six-county Chicagoland area, there was a 28 percent increase in new foreclosure filings the past year.

If that data is not upsetting enough, listen to this. (more…)

California mortgage brokers have a little over a week to pass criminal background and credit checks as well as a licensing exam as the state becomes one of the first to adopt new federal regulations, according to John Gittelsohn of Bloomberg.

California is one of the 20 or so U.S. states that currently lack any licensing program for mortgage brokers. (more…)