States Attorneys General need to be less concerned with investments based on RMBS and more focused on orderly cramdown mortgages with good faith mortgage modifications.

The two main competing views of government are clearly on display in the foreclosure crisis. Those who believe that it is government’s responsibility to redistribute money to rich people favor modifications that use government money to keep underwater homeowners paying banks.

Beginning on September 7, the Federal Housing Administration will offer a mortgage modification program for homeowners who are “underwater” on their loans — they owe more on their mortgage than the house is worth.

DC is a swamp in more ways than one. But an estimated 30,000 desperate homeowners have come here in the middle of a heat wave to attend the Neighborhood Assistance Corporation of America’s Save the Dream event. They started lining up Thursday night outside the Convention Center, though the event didn’t open till Friday morning. I was one of them.

Assistant Treasury Secretary Herbert Allison has redefined success of the mortgage modification program from providing permanent modifications to, get this, allowing people to enter the trial modification period. Duh, why bother with a trial period and making several months of additional payments if your NOT going to get a permanent modification?

Arrests are expected in mid to late June from 23 local mortgage fraud task forces set up by the FBI around the country.

Many of the banks lack the proper paper trail to prevail in foreclosure and that judges are beginning to wake up to this, and sometimes even cancel mortgages outright, it is not surprising that the banks are beginning to realize that their own bad faith, their own shoddy dealing, their own rupturing of the social contract has put them in a position where they may not be in the driver’s seat on foreclosures much longer. No wonder the baks are starting to preach the gospel of mortgage modification.

The goal of the Home Affordable Modification Program (HAMP) waterfall is to get the borrower’s monthly payment down to 31% of the borrower’s gross monthly income.

the Special Treasury Department Inspector General’s report to SENATE COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

NYT’s Gretchen Morgenson unravels the complexity and self-interest embedded in recent mortgage modification legislation.