New Foreclosure Legislation May Not Be Enough

Congressional aid to homeowners may need overhaul, not 'patches'
By Matt Cantor,  Newser User
Posted May 22, 2009 12:45 PM CDT
In this Feb. 17, 2009, file photo, a foreclosure sign sits outside a home for sale in Phoenix.    (AP Photo)
camera-icon View 2 more images

(Newser) – Congress’ Hope for Homeowners plan was aimed at fighting the foreclosure epidemic, and it’s been a success for exactly one person. Now, lawmakers have put “patches” on the legislation—but some worry the fixes aren’t going to do the job, ProPublica reports. Instead, it needs “some major, wholesale changes, since no one is using it at all,” says an analyst.

Before, he notes, Congress “put in so many restrictions it was unusable.” Homeowners faced limited eligibility and high costs; lenders were required to voluntarily cut mortgage balances and had to grapple with a complicated process. New rules may provide more homeowner relief, but leave some issues unresolved, like the nuisance of background checks. There may be “more iterations” to come, says a banker.