Investors Demand Better Compensation, Backstop for HAMP Modifications

[Robb]

File this one under chutzpah.

Investors Demand Better Compensation, Backstop for HAMP Modifications

An Illinois-based hedge fund is spearheading a move by mortgage investors to demand greater federal protection and compensation for allowing modifications to loans in their portfolios.

Magnetar Capial LLC of Evanston, Illinois, is seeking broad protection from declining home prices for investors who hold residential mortgage-backed securities, the magazine American Banker reported. Under the current federal Home Affordable Modification Program, servicers get cash benefits for refinances, and investors who agree to the modifications also get compensation up to $5,000 to hedge against the risk of the borrower re-defaulting.

In place of that system, Magnetar is asking the government to guarantee at least 75 percent of a home’s value under a new modification. It’s also asking the government to watchdog servicers’ modification practices.

(snip)

Henriques and his colleagues at Magnetar blamed “a misalignment of interests” between investors and servicers for the problem. “The implementation of the administration’s current modification program risks favoring the interests of servicers and borrowers over lenders,” the report said, adding that “such misalignment further harms the prices of mortgage assets.”

(More...)

[fasttense]

1. Let's just give every millionaire in the country 100 million and be done with it.

It's not like our tax dollars are going to improve the economy anyway. The unemployed are still unemployed and more are joining the rolls every day. We have not added any new net jobs to our economy in years. We just paid off most of the bank/Wall Street/Insurance firms to keep them from destroying a blighted economic system. Might as well give the remains of our tax revenues to the uber wealthy and quit trying to pretend our government is trying to help the middle class.

[marketcrazy1]

2. tax the wealthy

10 percent, a one time wealth tax levied on those who have a net worth exceeding 5 million dollars ( excluding the value of their primary residence ) we could solve alot of our problems. such a tax would generate close to one trillion dollars of revenue.. it was the wealthy who benefited most from the debt bubble so let them pay for the bank bailouts and the rest of this mess....... tax billionaires at 20 percent!!,, call it a generational wealth tax, collect it every forty years....