"The Obama administration may expand efforts to ease the housing crisis by banning all foreclosures on home loans unless they have been screened and rejected by the government’s Home Affordable Modification Program.
The proposal, reviewed by lenders last week on a White House conference call, “prohibits referral to foreclosure until borrower is evaluated and found ineligible for HAMP or reasonable contact efforts have failed,” according to a Treasury Department document outlining the plan."
Bloomberg
It seems like this overrides the contract entered into between the homeowner and the lender. If that's the case, all contracts lose their binding power. If that's the case, why in the hell would any bank ever lend anybody any money ever again?
By the way, if this goes into effect all home mortgagor's that have homes that are underwater should default as a group, overwhelm the system and live rent free for years while they try to get it straightened out. Immoral, perhaps. Effective, most definitely.
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