Employment Report Disappoints but Probably Won’t Delay Federal Reserve’s Tapering Plan

The September employment report disappointed analysts; will it also complicate the Federal Reserve’s plan to begin withdrawing the monetary support that has cushioned the economy throughout the pandemic?

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The Treasury Department’s first published review of the Home Affordable Modification Program (HAMP) results to date did nothing to refute complaints that the centerpiece of the Obama Administration’s foreclosure prevention efforts is falling well short of expectations.

If Shakespeare were writing today, he might still advise killing all the attorneys first. But if he followed a current trend, he might also suggest drawing a bead on appraisers as well. Real estate and financial industry trade groups, led by home builders and real estate brokers, are blaming flawed appraisals for depressing home values, delaying real estate closings and exacerbating the housing downturn.

Mortgage industry executives summoned to meet with Treasury Secretary Timothy Geithner last week agreed to do what they can to pick up the lagging mortgage modification pace. But they also complained that the expectations for speedy foreclosure relief were unrealistic given the complexity of the Obama Administration’s Home Affordable Modification Program (HAMP) program, the volume of modification requests, and the need for servicers to hire and train thousands of new employees.

It’s back – the bankruptcy cram down proposal, that is. Despite predictions that it was unstoppable after winning overwhelming support in the House, the measure, giving bankruptcy judges the authority to rewrite residential mortgages, flamed out in the Senate, unable to survive a blistering assault by the banking industry. Even its strongest supporters pronounced the legislation dead after only 45 Senate Democrats voted for it.