Wednesday, November 19, 2008

A Plan To Avoid Conflicts of Interest in Reworking Troubled Loans

The Seattle Post Intelligencer, Sunday, November 2, 2008 issue (pg pgB9) carried an excellent article by guest columnists John D. Geanakoplos and Susan P. Koniak entitled "Mortage Justice Would Be Blind." The article details a plan for reworking mortgages, that would remove this responsibility from "master servicers," who are currently stalled by conflicting alliances to various lenders. The responsibility for sorting out which mortages would be bests for reworking and which would not, would be transferred to a neutral group. This group would consist of community-based, community bankers, who would be government- appointed trustees and who would have no conflict of interest or loyalties to any lenders of securities in trouble, as they select securities for reworking or for foreclosure.

I feel the plan has merit for removing the solution to massive foreclosures from the hands of persons and corporations who have gains and or losses riding on the outcome.

In response to my efforts to bring the plan to the attention of the Treasury, I sent an email. I am told that they are sending all their e mails on to the Department of Public Affairs, and according to "Bernice," I may get a reply, but then, I may not.

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