Washington turns up heat on banks to bring down mortgage payments
The big banks and mortgage lenders that hold the key to loan modifications have been summoned to Washington for what is supposed to be some heavy duty arm twisting to get them to put pedal to the metal and bring down mortgage payments at a much faster rate.
Among the institutions ordered to D.C., are Bank of America and Citigroup.
But there have been many attempts to get the banks to stop their foot dragging and nothing has really seemed to work.
Now comes word from Federal Reserve Chairman Ben Bernanke that there are, in his words, "formidable headwinds" for the economy, which isn't good news even if you do manage to get your mortgage payments reduced.
In a speech in Washington, Bernanke is quoted as saying, "The economy confronts some formidable headwinds that seem likely to keep the pace of expansion moderate."
What he is talking about is tight credit and a weak -- to say the least -- job market. That is why meaningful mortgage modification is so vital to any sustained and robust economic recovery.
With banks still not lending and people still losing jobs -- albeit at a somewhat slower rate apparently -- it is very difficult for the housing market to get back up on its feet.
And, why is that so important? Because most economists will tell you that without a recovery of the housing market, there will be no long term recovery of the economy overall.
That's why Washington is so bent on twisting the arms and other body parts of bankers to get them to accelerate permanent mortgage loan reductions.
This would be a wonderful opportunity to give the nation the Christmas gift it so desperately deserves.
Charles Feldman is a journalist, media consultant and co-author of the book, "No Time To Think-The Menace of Media Speed and the 24-hour News Cycle."