Press Statement

STATEMENT: Real Home Mortgage Relief

Overcoming Legal Barriers to Helping Homeowners and Stabilizing the Financial System

By Michael S. Barr and James Feldman

WASHINGTON, DC—There is bipartisan agreement today that stemming foreclosures and restructuring troubled mortgages would slow the downward spiral harming financial institutions and the real American economy.

Treasury has unprecedented powers. If Treasury Secretary Henry Paulson can nationalize much of the housing finance system and even large swathes of banking in America, why can Treasury not slow the tide of foreclosures?

What has been missing is a way to get servicers, who control these loans on behalf of mortgage-backed securities investors, to restructure the loans themselves or sell the loans to the Treasury at a discount, so the loans can be refinanced.

Click here to read the full report.