Americans – the hoi polloi’s, banking institutions, economists, and politicians alike – have diverse opinions about Obama’s loan modification program. Although many have been rooting for the President’s mortgage glitch fix, some are still unconvinced whether this plan would really work to the advantage of the American populace. Needless to say, banks and lending institutions were the first to dispute this plan. According to them, it would only temporarily put a cap on the rising foreclosure rates and that in the end, it would just bring a double-edge effect to the whole mortgage practice in the US.
Lenders are saying that the loan modification program unveiled by the government would not be the solution to the mortgage crisis. As a proof to support that statement, they cited the trial run that the government did during the first quarter of the year. The run yielded many modified loans, but 50 percent of these went bad again after only a span of 6 months. In a nutshell, lenders are saying that if it did not work on a smaller scale, the mortgage restructuring plan would definitely bog down once implemented on a national level.
Lending institutions are also saying that the government is pushing the envelope too far in using its legislative powers to force unyielding lenders to modify loans. According to the plan, if banks and lenders would not agree to modify loans, courts in each state could make a verdict that would pave the way for reinstituting mortgages. Lenders also maintain that although the government is giving cash incentives for every loans they agree to modify, said incentives would still not cover probable financial liabilities that the mortgage process would involve.
The Obama administration is obviously under pressure to find quick fixes to the economic downturn. The loan modification program is not the only drastic measure that they are trying to implement this year. There are the credit card bill and the highly controversial health care bill. These laws and government programs seem to be enacted quite hastily, which resulted to a lot of uproar from different sectors. Although the main end of these would be to help the American populace rise above the downturn, there are still some loopholes that were not addressed by the administration.
In the end, Obama’s loan modification program would only work towards saving America from drowning in the sea of mortgage dilemmas if the government would ensure its proper implementation. The government should also intensify its campaign to get the support of lending institutions by thinking of ways to make it fair to them, as well, because at the end of the day, without the support of this sector, the program would only yield a plethora of modified loans gone bad.
Lenders are saying that the loan modification program unveiled by the government would not be the solution to the mortgage crisis. As a proof to support that statement, they cited the trial run that the government did during the first quarter of the year. The run yielded many modified loans, but 50 percent of these went bad again after only a span of 6 months. In a nutshell, lenders are saying that if it did not work on a smaller scale, the mortgage restructuring plan would definitely bog down once implemented on a national level.
Lending institutions are also saying that the government is pushing the envelope too far in using its legislative powers to force unyielding lenders to modify loans. According to the plan, if banks and lenders would not agree to modify loans, courts in each state could make a verdict that would pave the way for reinstituting mortgages. Lenders also maintain that although the government is giving cash incentives for every loans they agree to modify, said incentives would still not cover probable financial liabilities that the mortgage process would involve.
The Obama administration is obviously under pressure to find quick fixes to the economic downturn. The loan modification program is not the only drastic measure that they are trying to implement this year. There are the credit card bill and the highly controversial health care bill. These laws and government programs seem to be enacted quite hastily, which resulted to a lot of uproar from different sectors. Although the main end of these would be to help the American populace rise above the downturn, there are still some loopholes that were not addressed by the administration.
In the end, Obama’s loan modification program would only work towards saving America from drowning in the sea of mortgage dilemmas if the government would ensure its proper implementation. The government should also intensify its campaign to get the support of lending institutions by thinking of ways to make it fair to them, as well, because at the end of the day, without the support of this sector, the program would only yield a plethora of modified loans gone bad.
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