Efforts Underway To Stop Or Slow Down The Foreclosure Problem

Lately, I’ve watched CNBC for financial news even more than I watch CNN. Schizophrenic is the only word to describe the lending world right now. One of the blogs that I read regularly is RealtyCheck, which is published by Diane Olick, one of the major CNBC commentators on the housing and mortgage industry.

There have been several proposals put forth, but now the Fed and the Treasury are weighing in with plans to freeze the “starter rate” for owner occupied home loans that are about to adjust. That would help stem the tidal wave of upcoming potential foreclosures. Doing so would stabilize prices, and give the market time to absorb the massive inventory of homes that are already bank owned.

I think it it’s something that has to be done. The consequences to the overall economy if they don’t do something like this is much more devastating than if they do it. No it’s not a perfect solution, and I’m rarely in favor of government intervention, but I see it as the only viable solution.

Olick’s recent rant on the subject brought a response from FDIC’s Sheila Bair where she addressed the issue of fairness.

If you’re in the least interested, as you should be, RealtyCheck is worth reading every day. I highly recommend it.