Friday, October 1, 2010

A Bitter Pill For Mortgage Borrowers - TheStreet

A Bitter Pill For Mortgage Borrowers - TheStreet: "At an event this week, Bank of America (BAC_) CEO Brian Moynihan estimated that it will take the bank another three years to work through its 1.5 million 'seriously delinquent' borrowers. Jamie Dimon, who heads rival mortgage lender JPMorgan Chase (JPM_), said federal initiatives have simply delayed the inevitable for many borrowers.

'We have been writing off foreclosures that are delayed because of HAMP,' said Dimon, referring to the government's Home Affordable Modification Program. While the initiative has 'reduced [foreclosures] a little bit,' he added, 'we think it is going to go back up to where it was.'

The federal government has been attacking the mortgage crisis on several fronts -- targeting an interest rate of zero; extending $75 billion in workout-plan incentives; funneling special money to the 'hardest hit' states; and encouraging more 'dignified' means of exiting unsustainable mortgage debt -- such as short sales or deed-in-lieu transactions -- since a foreclosure moratorium was lifted earlier this year."

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