Rep. Barney Frank (D-MA), affectionately known around our humble shop as Bonnie Fwank, threatened banks this week that if they don’t voluntarily help more homeowners avoid foreclosure, Congress will force them to. Legislation was defeated earlier this year that would have allowed people to keep their homes by filing for bankruptcy. Frank, chairman of the House Financial Services Committee, promised to revive that bill, however, if banks don’t sacrifice. “People in the servicing industry and in the broader financial industry must understand that if this last effort to produce significant modifications fails, the argument for reviving the bankruptcy option will be extremely strong, and I think there is a substantial chance that the outcome will be different,” he said. The congressman further betrayed his anti-capitalist bent when he said, “I’ve had people come to us and complain, ‘Well, if you do that, I can’t make any money.’ The answer is that’s not my job. We’re not here to help you make money. We are here to help have a system in which you will make money as an incident of your providing funds to those who will use it productively.”
Frank’s threat coincides with the Obama administration’s push to speed help to borrowers through the foreclosure prevention effort started earlier this year. Treasury Department officials want lenders to modify 500,0000 mortgages by November. Since March, the Making Home Affordable program has logged 200,000 loan modifications.
