For loan modification legislation, less is more.
This past week witnessed the testimony of Douglas W. Roeder, Senior Deputy Comptroller for Large Bank Supervision, Office of the Comptroller of the Currency, before the Committee on Financial Services, before the United States House of Representatives. 
(Just try to imagine all that went on before this testimony happened; what went on during the testimony and what will go on in the future.) Without placing this thought into one of our pending time management departments, we’ll try to keep our summary of the Senior Deputy as simple as possible.
The Federal government, and now with increased legislation, state governments as well, have decided that banks and servicers have insufficient personnel to handle the number of pending mortgage modification submissions, regardless of whether the present program guidelines are met by the homeowners. To that end, our Washington representatives, whether elected or somehow federally employed, have created an untold number of departments, sub-departments, secretaries, senior deputy positions and perhaps even some clerks, to follow the much heralded foreclosure and delinquent mortgage problems in just about every State in our nation.
It’s about time. Homeowners' equity has evaporated; credit scores are at their lowest ever; banks will not provide refinancing to "at risk" customers and our homeowners who have applied for modification receive temporary solutions that solve nothing. Unemployment puts this whole process on the verge of total collapse, yet the Department of Treasury has mandated banks and servicers to modify. We have added regulations, laws, testimonials, mortgage metric data and now new accountability standards.
Bob Tedeschi, in a recent Sunday NY Times article December 11th, "Short Sales, Long Process", adds still another rung to this ladder leading nowhere. "Homeowners can continue to expect a painfully slow process that sometimes fails, and can ultimately lead them back to foreclosure". Adding this short sale practice into the mix of loss mitigation efforts, he states " further strains the bank's ability to handle them in a timely manner".
Overall, it seems quite clear that all indicators point to rapidly increasing homeowner defaults, bank and servicer personnel challenged to account for their responsibilities and rising homeowner complaints with no effective way to curtail these failures. The directives, laws, court opinions and public outrage have all been heard over the past two years seeking to manage homeowner assistance. But none have resulted in even the slightest meaningful success ratios.
Consideration of these failures may lead some to the inescapable solution that without mandated "teeth in the process" we will continue to report on foreclosure statistics, boarded-ups homes and devastated neighborhoods of shame. Perhaps we have had enough thought given to rules, regulations and hearings and we should return to the old fashioned way of doing business and getting business done. We need our federal government to send a meaningful economic directive to our servicers and lenders to pay the piper for failure. Denials of modifications where they should be granted must become an actionable basis to avoid foreclosure. With all due respect to our Senior Deputies and Chairmen and Senators, enough is enough.
Return to our local courts and governing bodies as Justice Spinner has done and bring the parties to Court, one by one, when the existing laws have not been followed. Spinner’s much discussed opinion of canceling a mortgage in Suffolk County has now resulted in his Order to the parties to return to Court and explain why the bank took further action despite his ruling.
Sometimes less is more. We do not need additional laws to restore home ownership goals. We have the tools we need, and there are those who will see that we can all add to the core qualities of our lives without more.
