I’ve written that I’m not a big fan of the legislation currently making its way through congress that would require lenders to cut homeowners a break as they look into the chasm of foreclosure. While I’m not against the idea of giving consumers a helping hand – particularly when doing so shores up the economy – I am against the idea of trying to characterize such moves as free, tax-neutral bailouts funded which the banks will fund. These costs are always passed on to the consumer.

But the financial world is hearing the saber rattling of the politicians (broadcast through a megaphone as we plow though this politically charged season) and this is having a fortuitous side effect: the banks are preemptively starting to get their own houses in order. Note this week’s announcement by Freddie Mac and Fannie Mae mandating stricter standards for independent appraisals – a move which is likely to trickle through to other lenders.  Loose appraisal standards have been a major contributor to real estate fraud, so this is a step in the right direction.

The industry is out to save its skin – not only to slow the bleeding which was caused by their reckless practices, but also to put a positive public spin on their progress. To this end Hope Now, President Bush’s government-led alliance of lenders is now claiming to have helped 1 million home owners fend off foreclosure.  But don’t expect this to significantly alter the tone of the various presidential candidates for whom foreclosure is a big election issue.

Move over big oil – there’s a new bad guy in town, and it may be too little to late for the lenders.