Why should the foreclosure madness continue?
Would you believe that recently, a record number of homeowners and lending institutions have partnered in the largest and most heralded effort in the history of this great country to save homes from foreclosure sales? I didn’t think you would. I wouldn’t believe it either.
Few, if any, who face the issues of mortgage default would find such a statement to hold water. In fact, most people who have entered this arena bear witness to a process that finds them 
discussing their woes with bank representatives in foreign countries, or with loss mitigation center counselors who have no e mail addresses, no last names and no phone numbers that reach them at their desks.
Clearly, the loan modification process and accountability measures now in place are less credible than the rancher who says he can herd cats into a barn. In search of a solution, we read that our Federal government has enabled its Treasury Department for the past 9 months to develop enormous crates of rules and regulations known as the HAMP program. National lending institutions and mortgage servicers have signed up to comply with these concepts.
So, why are we still suffering this madness? Where are the solutions HAMP promises and why are they not being followed? Few people are equipped to take the temperature of these topics and provide us with real-time answers. Richard Thaler has given his readers this past Sunday in his Economic View column in the NY Times a very distinctive point of view. He similarly concludes that "Lenders have been reluctant to renegotiate mortgages, and government programs to stimulate renegotiation have not gained much traction."
Thaler suggests a vastly different approach which hardly requires reams of regulations to implement. "The bank would be required to reduce the mortgage by the average price reductions of homes in the neighborhood. In return, it would get 50 percent of the average gain in neighborhood prices-if there is one-when the house is eventually sold".
Sounds simple, but is it too simple to work?? This supports all economic theories that foreclosures are just bad business for our neighborhoods and create instability and chaos in every facet of our lives. Of course, we will hear the cries that the hunted have outfoxed the hunter; that the borrowers and homeowners who have defaulted in their loan obligations are being given a free pass for their failures.
We will just have to cope with such criticism and shoulder these moral dilemmas for our neighbors and friends. Moreover, we must continue to hold forth hope and solutions to the millions of Americans who are now facing such problems, as well as to our national lending institutions who are our partners in recovery. We must allow our local courts to enable the present legislation to hammer out foreclosure settlements and we must educate our friends and clients that there are real and definite paths to follow after receipt of the foreclosure summons and visit from the process servers.
We must be aggressive in our outreach to those in need of creating new ideas and developing new approaches to handle a foreclosure, and we must begin to imagine that homeownership can be restored. Credit scores will once again become a vital and sought after statistic and people will willingly and with great hope, visit such sites as CreditKarma.com or Quizzle.com and other credit sites as a source of pride.
The thought of saving homes and neighborhoods is a reality for many who visit our offices. Why do some choose to enter our doors and opt out of the herd of madness? Rather than spend any time on that question, let us hope that many more will choose to do so and restore confidence so that banks can do what they do best. Let us hope we can once again and in good faith and conscience ask our lenders to restore our neighborhoods with loans, jobs and homes.