You have to love Barney Frank’s bull-in-a-China-shop approach to dealing with the financial crisis. When he’s not busy getting into fights with Erin Burnett on CNBC, he’s not a fraid to wield a big stick (and speak loudly) to get his way.
Yesterday he was banging away at bonuses again.
The latest: he’s pissed at the banks for not doing more on the loan modification front.
AP: A senior House Democrat threatened banks Wednesday that if they don’t volunteer to save more homeowners from foreclosure, Congress will make them.
In a sternly worded statement, Rep. Barney Frank said Congress will revive legislation that would let bankruptcy judges write down a person’s monthly mortgage payment if the number of loan modifications remain low.
Frank, chairman of the House Financial Services Committee, also said his committee won’t consider legislation to help banks lend unless there is a “significant increase” in mortgage modifications.
We kind of doubt he’s going to get anywhere with this, especially since the last time they threatened to give bankruptcy judges this kind of power, Democrats got skiddish. But we need a good answer for why the loan mod schemes are such a disaster. If it’s really true that the program is violently in the worst interest of banks — causing them to drag their feet as much as possible — then we just need to scrap it and start over, otherwise too many desperate borrowers will get screwed thinking they have a chance. On the other hand, if it’s a matter of capacity and loan mod infrastructure, then the problem should go away.
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