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There were some very interesting points raised in this discussion today on CNBC. What do you think about the points the CNBC reporters were making? What about those made by Professor Brent White from the University of Arizona in his recent research paper ?

The lead in from the CNBC host was an interesting attempt to sensationalize Professor White's observations. Professor Brent White's basic point was corporate America and home owners are living by two different sets of rules. It is clear from all the bailout and intervention, there are two sets of rules. Financial institutions were given trillions of dollars and yet many of the banks have been unresponsive and unhelpful in countless situations with the average borrower. My thinking on this situation has changed over time due to the lack of good faith coming from bailed out banks. There is a story in the bible about a debtor that's large debt was forgiven only for that man to be harsh with someone owing him a much smaller amount of money. It did not go well for the harsh lender in that parable. It might be wise for the many "bailed out banks" to read Matthew 18.

There were 3 CNBC reporters pointing out why Professor White was wrong & they did a poor job in my opinion. I am curious to see what people think about this interview, lenders and borrowers alike. Also, was it just me, or were the looks and words coming from Michelle Caruso-Cabrera over the top? She said banks are paying too by absorbing big losses. This is true, but they have been given trillions of tax payers money with very few strings attached and they were the ones offering and approving these loans.

From a ground level perspective: In many of the short sale situations I have worked on representing home buyers & sellers alike, the banks are very slow to answer short sale request. They are very slow to answer loan modification request and it is unfortunate because everyone is suffering from the lack of commitment from lenders to accept their portion of the blame in these situations. 

There is plenty of blame to go around. In some cases, loan officers helped people select loans that were very risky & lenders made loans they should never have made. Buyers bought homes they should not have purchased and real estate agents sold homes to folks that would have been better off with smaller homes or renting. There are many borrowers that simply bought at a high price and are stuck in a bad situation, maybe a lost job or? There are many good people being hurt.

Obviously assigning blame is easy. The hard part is fixing the problem.

A couple things that come to mind are simply to make any financial firm that accepted tarp money hire enough people to get through the massive number of loan modifications and short sales that need to be completed. When a bank has been presented with a viable short sale package from a borrower the lender should be required to do an appraisal and give a price they will accept based on the market value. (If this were to happen banks would get a higher price for short sales) Also, some rules of the game would be helpful. Banks should also give borrowers and real estate agents the exact criteria they will use to accept or deny a short sale and make a commitment to have them closed in a timely manner. (This would help the banks net more money from the sale as well)

Real Estate agents should be required to be educated on short sales through some standard process and be certified to work these files. I am sure there are many more good ideas on what could be done to move through these issues and I would love to hear your thoughts...post it here or email me.