Federal Government To Pressure Banks

The Federal Government is going to be exerting some pressure on the financial system again, this time to help borrowers sort out their mortgages before they get into a short sale or foreclosure situation. It appears that t he making Homes Affordable program is not moving fast enough for some of the heads of the Treasury.

The pressure is going to come in the form of fines and possibly public chastising. The core element is that banks made bad loans to folks that (in some cases the knew) could not afford them and it is the banks who now need to help make the situation right.

Fundamentally markets may not be able to tolerate another rash of foreclosures. Prices could fall drastically further eroding home equity and value. At this point the investor class has been scooping up lower end properties for rental units at a steady pace, but how many more homes can they absorb?

As a Cincinnati Realtor I have helped a number of local investors in the last few months, how ever I am not sure if there are enough of them out there to maintain the current supply / demand ration. I hope this program can pick up the pace and help the millions of home owners in trouble that seriously need it.

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