Times Articles on Mortgage Regulation, Privacy, and Marketing

by Jeff Sovern

Here is the article in today's Times on the new Fed rules that Alan blogged about yesterday.  Saturday's edition noted in "By Large Margin, Senate Votes to Help Homeowners and Overhaul Loan Agencies" that the Senate had approved the bill intended to help borrowers avoid foreclosure.  The bill now returns to the House.  Sunday's issue included "The Silence of the Lenders," which tells the story of the email Angelo R. Mozillo, Countrywide's chief executive called "[d]isgusting."  The email was from a borrower, Dan A. Bailey, Jr., and sought a loan modification that would permit him to keep his home.  As the headline implies, the article is about how borrowers are having difficulties getting the attention of loan servicers. Excerpts:

* * * As of the most recent quarter, 2.67 percent of the loans that Countrywide services were more than 90 days delinquent. (The Bank of America Corporation acquired Countrywide on July 1 and is now overseeing the Countrywide portfolio.)

Lenders and servicers like Countrywide are inundated with requests for help from borrowers who cannot afford their loans. Alas, these companies’ operations weren’t set up for such work; servicing units were originally intended to collect monthly checks from borrowers and then disburse the payments to mortgage holders. During the boom years, there was little need to advise borrowers or restructure loans.

* * *

That said, foreclosures are vastly outnumbering loan workouts today, a year and a half after the subprime mortgage debacle began creeping into the headlines. In May, for example, even as Hope Now conducted 70,000 loan modifications, an estimated 85,000 families lost their homes to foreclosure. That same month, 276,000 loans either entered or completed foreclosure.

According to an April report by the State Foreclosure Prevention Working Group, a unit of the Conference of State Bank Supervisors, a regulatory alliance, about 70 percent of delinquent borrowers weren’t getting help in renegotiating their mortgages.

* * *

Even when borrowers receive modifications, their loans can still be unaffordable or problematic. According to the working group, 32,000 loans that were recently modified are already delinquent again. One reason may be that very few modifications involve reducing the principal balance on the loan.

I don't want to quote any more of the article, but the rest is worth reading if you care about the mortgage crisis.

Privacy is also getting attention.  The online edition of the Times reports today "Google Will Protect Users' Identity From Viacom."  An excerpt:

Viacom and Google have reached an agreement about how information about YouTube users can be used as potential evidence in the ongoing copyright dispute.

Instead of giving Viacom the user names and Internet Protocol addresses for everyone who has uploaded or downloaded a video on YouTube, Google will provide an anonymous code number that represents those names and addresses.

We had reported on the original dispute here.

Still on privacy, yesterday's Times reported "Rules Weighed for Online Data." An excerpt:

Last week the Senate Commerce Committee began to look at how online companies collect and use data about Internet users for advertising, and several big Internet companies told the panel that it needed to pass a new law to enforce privacy standards for a range of online and offline activities.

While the Center for Democracy and Technology agreed that a statute was needed, Lydia Parnes, director of the FTC's  Bureau of Consumer Protection, disagreed.

The Times also reported yesterday in "Product Placements Acquire a Life of Their Own on Shows," that sponsors are suggesting plot lines and critiquing episodes.  The FCC is exploring what type of disclosures should occur, if any.  Will we someday see the FTC bring a deception action based on a product placement?  Another side of marketing was on view Sunday in "Warning: Habits May be Good for You," about how marketers have persuaded people in the African country of Burkina Faso to wash their hands, thereby saving lives.

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