Monday, November 29, 2010

Fed Favors Rule Change in Bank Foreclosures

From bobbyw24 on the Dailey Paul..

There are two sides to every delinquent loan — a lender who made a bad lending decision and a borrower who cannot repay. Yet, banks have never acted as if they bear responsibility for the mortgage mess.

Now, despite mounting evidence of borrower mistreatment, the Federal Reserve has proposed a rule that would disable the most effective legal tool that borrowers have to fight foreclosures--the Turth in Lending Act.

Citing concern over banks’ compliance costs, the Fed's Proposed Rule would require a borrower to pay off the remaining principal before the lender gives up its security interest. That would be clearly impossible for troubled borrowers. So the Fed’s proposal would benefit the creditor who violated the law rather than the borrower, paving the way for foreclosures that otherwise could be avoided.

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The story on the NY Times site is subscriber only. Laws are normally grandfathered in, that is, existing cases should be ajudicated by existing law at the time of the agreement. Here the fed wants the rules changed on homeowners in the middle of cases. If this flies, it just proves again that the banks own our government and if we want it back we have to take it from them.

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