Remember when the liberals said the government wasn’t “taking over the banking industry”?

WASHINGTON (AP) — A senior House Democrat threatened banks Wednesday that if they don’t volunteer to save more homeowners from foreclosure, Congress will make them.
In a sternly worded statement, Rep. Barney Frank said Congress will revive legislation that would let bankruptcy judges write down a person’s monthly mortgage payment if the number of loan modifications remain low.

Sounds like the government is completely running it now. The best part of the whole thing is Barney Frank helped cause the whole housing collapse by requiring banks to lend to low income families to start with. Now that they can’t repay the loans, he’s telling the banks they can’t get their money or foreclose. Classic liberal politics.

I bet the Auto Industry guy’s butt cheeks just slammed tight. They know what is coming their way next.

citi to allow jobless to pay less on loans..do you guys think this is a good or bad idea? taking a poll for my management class wanted to know what or how you guys feel.

THIS IS THE ARTICLE I FOUND IN THE WALLSTREET JOURNAL
Citigroup Inc. announced Tuesday a new program aimed at addressing the latest challenge facing the mortgage industry: unemployed homeowners.

Under the program, Citigroup will temporarily lower mortgage payments to an average of $ 500 a month for certain borrowers who have recently lost their jobs and are at least 60 days behind on their mortgage payments. Borrowers will be allowed to make the lower payments for three months. Citigroup will waive interest and penalties during this period.

Tracking the Economy
House May Tighten ‘Cramdown’ MeasureSortable Chart: First-Quarter LayoffsCitigroup’s announcement comes days before the Obama administration is expected to announce guidelines for its massive loan-modification program, a cornerstone of its effort to fight the housing crisis. The bank’s new initiative takes aim at one of the hardest groups of borrowers to assist: those who have seen their income fall sharply.

“We expect that there will be thousands of people we can help,” said Sanjiv Das, chief executive of CitiMortgage, who called rising unemployment “the single biggest issue facing mortgage servicers.” Although the novel program will help just a small fraction of troubled borrowers, Mr. Das said he hopes it will be copied by others in the industry.

To qualify for the program, borrowers must live in the home and have a mortgage that is owned and serviced by CitiMortgage. The program applies only to loans of $ 417,500 or lower. Citigroup holds 1.4 million mortgages on its books. It also services another four million loans for others, but those don’t qualify for the program.

Citigroup has received at least $ 45 billion in taxpayer funds, and the federal government is now poised to boost its stake in the company to as high as 36%. That has raised fears on Wall Street that the company will take steps that are politically, but not financially, helpful.

In January, the New York bank bucked the rest of the industry and endorsed legislation that would allow bankruptcy-court judges to modify the terms of troubled mortgages. Citigroup executives have said that move, which could take a toll on the company’s bottom line, was designed to win favor in Washington.

Mr. Das said the federal government “had no role at all” in the company’s latest loan-modification effort. The new program “was created by us, developed by us and is now being implemented by us,” he said. “There was no pressure at all.”

The new initiative follows Citigroup’s announcement in November that it would offer to modify the terms of as much as $ 20 billion of mortgages for borrowers who are current on their loan payments, but are at risk of falling behind. Citigroup declined to provide figures on the number of loans modified under that program, but a spokesman said the bank has been in contact with about 50,000 at-risk borrowers, has done “some workouts” and has “several thousand loans in the pipeline.”

The weakening economy is creating a new wave of troubled borrowers, many of whom are grappling with job losses or reduced hours. The unemployment rate climbed to 7.6% in January from 7.2% in December, according to the Labor Department.

At Neighborhood Housing Services of Chicago, 20% to 30% of homeowners seeking assistance need help “because economic conditions have made them unable to pay their loans,” said Michael van Zalingen, director of homeownership services. A year ago, “virtually all” the borrowers seeking to avoid foreclosure had subprime adjustable-rate mortgages and were facing interest-rate resets, he said.

Many of those struggling because of the weakening economy have few options. Borrowers who have lost their jobs are the hardest to help, because “they don’t have the income to make a payment anymore,” Mr. van Zalingen said.

Borrowers who qualify for the program typically spend an average of $ 1,500 a month on mortgage-related payments. The lower, $ 500-a-month payment was designed to make the mortgage a financially viable alternative to renting an apartment for borrowers struggling with temporary job loss, Mr. Das says. Average rents on a one-bedroom apartment range from $ 713 a month in the Southwest to $ 1,623 in the Northeast, according to real-estate research firm Reis Inc.

To qualify for the program, borrowers have to provide proof of unemployment. They must also sign a form promising that they will look for a job and let Citigroup know if they’ve found one.