I am torn on the issue below with the fact that the Gov’t is threatening to withhold incentives or demand repayment. Shouldn’t the goal to be that the banks repay the money and work to achieve no need for gov’t incentives?
That is unless the incentives they are speaking about are varying rates that the lender receives from the fed… now that I can get on board with!
This way, if a bank fails to maintain a standard based on customer feedback, then the Fed Funds rate may have a increased rate / penalty. I do believe that would actually motivate these lenders to work to the best interest of more borrowers and in the long run, their investors.
The incentive / penalty should have a sunset of no more than 12 to 18 months, to get us out of this mess and then let the lenders go back to doing business based on their own customer service and no threat of Gov’t intervention.
The best thing about the idea, is that when the Gov’t starts taking notice, the banks will as well, and it will help to ensure more borrowers see the pitfalls of dealing with certain lenders. Therefore I am all for the rating system but not happy about the threat of Gov’t intervention for an indefinite time frame.
There are no free rides, but there can be incentives in place to ease the pain. Imagine a lender trying to explain why their rates are .25% or .5% higher than their competitor, because they failed to meet certain customer standards… would you continue doing business at that bank?
By Brady Pevehouse a full time Orlando Real Estate Agent