With the foreclosure moratorium expiring on January 31st. Congress is working with the incoming administration to create a plan to stem foreclosures. With the staggering projection of up to 13 million total foreclosures within the next 4 years it's clear that we need to do more than give all the money to the banks. Please read the insert within the article labeled "fact file" which outlines in greater detail, the ideas that are being considered.
Potential solutions include:
1. bankruptcy reform
2. an FDIC plan to create monetary incentives to mortgage servicers for loan modifications
3. eliminating restrictions that would make the FHA "Hope For Homeowners" program a more viable solution
4. raising loan limits to allow more properties to qualify for conforming loans
5. tax incentives
6. lowering interest rates
I believe it will take a reasonable combination of all these solutions in order to avert further disaster in the housing market. Those of us in the REO industry should watch very closely as this will signal a turnaround and cause us to redesign our acquisition and exit strategies.
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