CALPIRG Blog

In two weeks CALPIRG will take part in the first of many hearings to flesh out policy for a loan modification mediation program.  The broad goal of the program is to get banks and borrowers to sit down with an impartial mediator and work out a plan to keep borrowers in their home paying off their loan at an amount they can afford. 

This will be the third such attempt to find a palatable way for banks to modify more loans.  I’ll be the first to admit that the banks have a tough job ahead of them.  There are so many borrowers in trouble it is staggering.  But from all accounts they are doing a terrible job dealing with the crisis.  This LA Times article from today really highlights the bunker mentality that many banks have right now.

Painfully few borrowers are getting loan modifications and the ones who are still don’t get enough relief to keep up with the payments.  Outside consumer groups and government programs can come up with all sorts of potential fixes, and they should, but the bankers are holding the keys.  If they don’t want to participate, this recovery will take way longer than it has to.