Mortgage Help is on the Way

There may be hope for the mortgage crisis yet. Today President Obama enacted measures to help borrowers under financial stress. New incentives for both lenders and loan servicers are expected to make loans more affordable for buyers. The measures also call for streamlining the program Hope for Homeowners, which may help people who have been seeking a way to refinance without much luck.

The bill also provides $2.2 billion in aid for homeless families.

These measures are just in time,  following a 2.3% increase in mortgage applications from last week, up 42% compared with the same week last year. Applications for refinancing are also up to 73.6% of total applications.

Meanwhile, the creation of a new financial regulatory commission, a sort of “watchdog” consumer agency, is being discussed by the Obama administration. Its purpose would be to offer protection to consumers who use credit cards, mortgages and other financial products.

Some are naturally leery of yet another administrative add-on–especially banking regulators and agencies, who would surely take a large hit in both power and money.

Others are saying it’s about time; in fact, the main purpose of the commission would be fix the root causes of economic problems, including the predatory lending practices that started many of these issues in the first place.

Much of this commission is the brainchild of Harvard Law professor Elizabeth Warren, chair of the Congressional Oversight Panel.

“Why are consumers safe when they purchase tangible consumer products with cash, but when they sign up for routine financial products like mortgages and credit cards they are left at the mercy of their creditors?” Warren implores.

Most homeowners would likely agree that government regulation and aid is deeply needed, and that prior regulation was near nonexistent.