DUH!

“Government likely has a role to play in supporting mortgage securitization, at least during periods of high financial stress,” said Federal Reserve Chairman Bernanke on Friday to a symposium on the mortgage crisis and the economy at the University of California, Berkeley. Glad you noticed, Ben. Think Henry shares your feeling? Ben even mentioned some possible directions, like federal insurance for bonds used to back mortgages. Keep thinking, Ben, ‘cause I’m sure that, in time, you and that Treasury guy might figure all this out. Glad this little issue finally crossed your radar screen; kind of thought you might have missed it.

The folks at JP Morgan Chase seem to have got the picture… even as the feds just muse about the alternatives. They actually heard the cries of angry consumers, more than you can say for our elected and appointed representatives. According to an Associated Press report on Friday: “JP Morgan 's expanded program aims to help avoid foreclosures on an estimated $70 billion in loans, which could help as many as 400,000 customers. The New York-based banking giant has already modified about $40 billion in mortgages, helping 250,000 customers since early 2007… JPMorgan will not put any loans into foreclosure as it implements the expanded program over the next 90 days.”

What’s so stunning is that this restructuring comes from a big boy financial institution, operating in a period of falling values, consumer prices and increasing joblessness – a period of possible prolonged “deflation” where positive growth of any kind becomes difficult – without the possibility of “syndicating” loan packages (sharing the risk) with other banks, because banks don’t trust each other enough to lend to each other. I’ve trashed a few financial institutions in the past, but this time, I’ve got to give some serious kudos to the men and women of JP Morgan Chase. That took guts.

Some people who aren’t homeowners are wondering why this matters to them; they are angry that some folks might get federal help while others do not. Maybe it’s easier to think of this mortgage crisis as a tornado that touched down and took out a bunch of your neighbors’ homes – looking like a random assault from an aerial map. If your neighbors’ homes remain unfixed, even if you are a renter, you won’t like living in that neighborhood very long. Values will crash, and the very character of the neighborhood will change for the worse. And let’s face it, some of those neighbors’ homes may just have to be cleared for new parkland… not everybody deserves to be bailed out (not to mention that there should be a way for the taxpayers to get paid back too).

The shame of all this is that a big old bank has come up with answers, when our government can’t seem to get out of its own way to begin the fix. JP Morgan’s already implementing a solution while the government’s still playing with “possibles.” Please send the moving trucks to Washington at little earlier than January… I’ve got this list of people in D.C. that need to be moved out right now!

I’m Peter Dekom, and I approve this message.