Spring Conference Review - reomac

GENERAL SESSION III:
Town Hall Session
Moderator:
Panelists:
John Vella, GMAC
Senator Ronald S. Calderon, (D – Montebello)
Peter Monroe, Esq., Wilhurst Oxford Venture Capital
Rocky Rushing, Chief of Staff for Senator Calderon
Christopher Thornberg, Ph.D, Beacon Economics
By Ron
Deutsch, Esq.
A
panel of distinguished speakers
addressed a full auditorium at the
REOMAC® conference held in Palm
Desert, CA. These speakers included, John
Vella of GMAC Mortgage LLC, Senator
Ronald S. Calderon of California and a
member of the Senate Banking Committee,
Dr. Christopher Thornberg of Beacon
Economics, Peter Monroe, former President
of the RTC Oversight Board and Rocky
Rushing, Chief of Staff to Senator Calderon.
They discussed many topics including
hastening foreclosures, proper government
policy, loan workouts and other solutions to
the banking problems facing the industry
and country.
Senator Calderon stated that a desired
government goal is to have fewer homes
on the real estate market and helping
homeowners stay in their homes. Although
he recognizes that foreclosures may still
be inevitable in many cases, and keeping
the homeowner in the house may not
be possible. Senator Calderon also
recognized that foreclosures benefit first
time homebuyers to enter the real estate
market and purchase their first home.
Peter Monroe stated that he is “mad as hell”
with respect to the current policy. In his
prior role, the RTC seized banks and their
assets. They did not prop up failing banks,
instead allowing weak banks to fail. That
said, he believes he sees the first ray of
sunshine in Geitner’s PPIP program. The
program provides for toxic assets to be
purchased by creating a fund comprised of
7% private investor money, 7% TARP funds
and 86% non recourse capital. Monroe
believes that private banks have no chance of
surviving if asset values drop precipitously.
The drop in asset values, reduce a bank’s
regulatory capital requirements.
Chris Thornberg, always a vocal presenter,
stated that massive foreclosures are not
the problem. He recognized that many
people purchased homes that they could
not afford or committed fraud in applying
for their acquisition loans. Compounding
the existing problem is a bad real estate
market. He firmly believes that, Senator
Calderon’s stated goal of keeping individuals
in their homes, although well intentioned
is misguided. Instead foreclosures should
be allowed to occur quickly to flush the
system. However, he advocated, that a
“mulligan” rule should be implemented to
benefit foreclosed borrowers. That is, the
fact that a foreclosure occurred should be
deleted from a borrower’s credit report.
That would allow the former homeowner
to enter the housing market again and to
purchase a home again at a much lower
affordable price.
continued on page 34
REOMAC ® update tm Ma y / Jun e 2009 33