The new head of HUD recently said that banks that receive government bailout money will be required modify more loans for troubled homeowners. Loan modifications have heretofore been entirely voluntary but it appears the federal government is further turning the heat up on banks to do more to help struggling homeowners. Here is an excerpt from a recent Bloomberg article on the subject:
April 9 (Bloomberg) — Banks receiving federal aid through the U.S. Troubled Asset Relief Program must also take part in the government’s mortgage modification initiatives, Housing and Urban Development Secretary Shaun Donovan said.
The U.S. is “going to require as a condition of participation in TARP going forward that banks do participate in” the Obama administration’s Making Home Affordable plan, Donovan said in an interview on Bloomberg television today. The requirements would apply only to banks taking new TARP money in the future, not those that have previously taken aid, Melanie Roussell, a HUD spokeswoman, said in an interview.