I don't think the market will like this news. It is not the full/complete bailout for homeowners they were hoping for. This is actually bad for Fnm and fre because they are shouldered with crappy mortgages where as before they used to be able to comb through the shit pile. Also we will get some price discovery on some of these non performing mortgages and homes. Watch out fnm and fre stockholders you are about to get diluted then crushed. Congress crushes FNM only to get stuck with their whole collateral of trillion dollars later.
All these "potential" bailouts just give homeowners and lenders hope to hang on.
It is so cruel. It's like the boyfriend who won't break up with his girl, knowing deep inside it will never work out. The girl's heartache will end up worse the longer it goes on.
The outcome can't be changed. Prices will revert to approx 3 times the income of the area. Some places are getting closer to that, others are still miles away.
Stop the false hope so that she (I mean...we) can get on with our lives.
Given the differences of opinion on this blog as to the causes, fixes, and extent of this problem....from people who care and/or are experts on this problem....I find it hard to believe that Congress can come close to a solution that actually helps.
Times Are Tough, Except in Repo Business
By DAVID STREITFELD 4:21 PM ET
The recreational boating industry has faltered amid the housing slump and one of the largest boat repo operations in the country is repossessing nearly a boat a day.
Well, the federal government has been in housing for 40 years, and has been a cause and fixer of real estate bubbles.
Who is to blame? I would put the blame on this flip flopping economic system we have. The ides that government is this way for a while, then that way for a while is like a bubble pump.
"I find it hard to believe that Congress can come close to a solution that actually helps"
Which part of LENDER BAILOUT don't you understand?
This has ZERO to do with benefit to those with mortgage obligations. They don't have lobbyists working over members of congress. If anything it might somehow get them to pay, which only benefits the lenders.
Lovely. Pandering for votes is what this is all about. Can you imagine the money being spent by lobbyists in Washington to get this thing signed into law. Simply disgusting. Bail-out after bail-out at the taxpayer's expense.
"Who is to blame? I would put the blame on this flip flopping economic system we have. The ides that government is this way for a while, then that way for a while is like a bubble pump."
I certainly hope Bush will veto it, as he has promised to. I'd guess this is the first salvo in the bailout partisan blame-game, which will not end until the next election is done, after which Congress will be able to enact a full bailout, and offload all the speculative losses from the irresponsible people onto the responsible taxpayers.
I would seriously go for 4 more years of Bush, if that were possible, just to avoid the inevitable bailout and all that it implies. Weighed against all the other bad things Bush would do, I think it would be an overall win; and that's really a sad commentary on how bad the current candidates are.
I really want (how could I change that to need?) a 30 year fixed 4% mortgage. Although if pushed I would accept 3%. Do these new proposals drop the interest rates to something reasonable?
When you look at the $300 billion guarantee being discussed, I really wonder why people hyperventilated so much over the risk posed by the $30 billion BSC deal. At least in that case, JPM was going to take the first billion loss.
"The bill addresses the root of our current economic problems - the foreclosure crisis - by creating a voluntary initiative at no estimated cost to taxpayers which will help Americans keep their homes," Christopher Dodd, Democrat chairman of the Senate Banking Committee, said in a statement.
This is true. The cost to taxpayers has not yet been estimated. But it's gonna be GINORMOUS!
I would seriously go for 4 more years of Bush, if that were possible, just to avoid the inevitable bailout and all that it implies. Weighed against all the other bad things Bush would do, I think it would be an overall win; and that's really a sad commentary on how bad the current candidates are.
The only reason Bush would go ahead and veto this is because he is a lame duck with nothing to lose. If he were up for election again this Fall he'd likely sign it.
Oh, and given the damage this idiot has done already, I really wouldn't want to give him 4 more years in which to get us mired down in Iran.
OT, sort of. The shrub is angry about NBC's description of the economy in recession among other things and his legal counsel sent NBC a letter...
[Lastly, when the Commerce Department on April 30 released the GDP numbers for the first quarter of 2007, Brian Williams reported it this way: "If you go by the government number, the figure that came out today stops just short of the official declaration of a recession."
The GDP estimate was a positive 0.6% for the first quarter. Slow growth, but growth nonetheless. This followed a slow but growing fourth quarter in 2007. Consequently, even if the first quarter GDP estimate had been negative, it still would not have signaled a recession neither by the unofficial rule-of-thumb of two consecutive quarters of negative growth, nor the more robust definition by the National Bureau of Economic Research (the group that officially marks the beginnings and ends of business cycles).
Furthermore, never in our nation's history have we characterized economic conditions as a "recession" with unemployment so low in fact, when this rate of unemployment was eventually reached in the 1990s, it was hailed as the sign of a strong economy. This rate of unemployment is lower than the average of the past three decades.
Are there numbers besides the "government number" to go by? Is there reason to believe "the government number" is suspect? How does the release of positive economic growth for two consecutive quarters, albeit limited, stop "just short of the official declaration of a recession"?]
In a second letter, the president's legal counsel also asked Brian William's to refer to the president as "the Great George W. Bush" and to stop refering to the US as "America" and to call it "'Merica."
Oh, and given the damage this idiot has done already, I really wouldn't want to give him 4 more years in which to get us mired down in Iran.
skeptictank | 05.19.08 - 6:53 pm | #
It doesn't take four years to do that - four hours of bad policy could leave us mired for four years..
"I am mad as hell and I am not going to take this anymore!" -Network
I am seriously as sick of this crapola as I can get. The senate and house, who obsess with opinion polls, ignore them this time to bailout wall street and the banks. No public debate. No vote. Nada. Is there some way to get the bailout bills on every state election ballot in November? I mean something along the lines that you would need 50% plus states to go along with it? Is there anything we can do to stop this insanity?
Don't worry, if Bush vetos it, by the time the next Prez and Congress is installed, whatever is gonna happen will have happened already, and they are going to need to go into picking up the pieces mode.
Shrub will veto it but Congress probably has the votes to override it. The Dems are finally calling the shots, --it's like the final days in Hitler's bunker on Republican side of the aisle and they know it.
"Shrub will veto it but Congress probably has the votes to override it. The Dems are finally calling the shots"
And, that's a good thing? There's no difference between the 2 parties. Hacks to the biggest bidder, AKA: Lobbist. Whores, one and all. You really think that Obama is gonna be any better? He's just a young whore!
Cat and Rats
I never said they were any better--just the way it is right now,
And to prove your point, Dean Baker writes about this "Democratic" bailout bill"
"Congress has shown little interest in ensuring the new guarantee prices reflect fundamentals, making it likely many of the people "helped" under the program will end up facing foreclosure a second time. However, to make matters worse, they came up with the idea of financing the plan by taking away a stream of funding that had been dedicated to help low-income renters.
That's right; Congress wants to take away money from low-income renters to help bankers that made bad loans in the housing bubble. As we all know, when the banks are in trouble, it is not the time to talk about the free market.
The real painful part of this story is it would be very easy to help the real victims in this story: the low- and moderate-income homeowners, who were suckered into buying homes at bubble-inflated prices with bad mortgages. Congress could just temporarily change the rules on foreclosure to allow moderate-income homeowners facing foreclosure the option to stay in their home paying the fair market rent.
This would provide these families with housing security. At least as important, it is likely to result in many of these families remaining in their houses as homeowners, since banks will have a strong incentive to negotiate new terms on mortgages in order to avoid becoming landlords. And the best part of this story is that families would benefit from this change the moment Congress passed the law. There is no need for a new bureaucracy or any taxpayer dollars.
That is what Congress would do if it was serious about helping families facing foreclosure. Unfortunately, the banks seem to rank higher in its concerns - remember, just three years ago, it made the bankruptcy laws more stringent (applied retroactively), to boost bank profits.
Apparently, the banks rank so high Congress is even prepared to take money away from low-income renters to meet their needs. Stealing candy from babies would be a step up for this crew."
Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer
The Democrats pig out at the same trough as the Republicans(sorry for the long post)
"I would seriously go for 4 more years of Bush, if that were possible, just to avoid the inevitable bailout and all that it implies. "
So you're willing to let this mass murderer start another 2 or 3 illegal wars of aggression against countries that are no threat to the US, so long as that prevents this bailout?
Under the Frank/Dodd FHA expansion plan, most of the cost of providing $300 billion in additional loan guarantees would be covered by mortgage insurance premiums. CBO estimates taxpayers would be on the hook for $1.7 billion in losses if the program funded 500,000 refis.
Under the Dodd/Shelby compromise, Fannie and Freddie would cover any losses instead of taxpayers. The money would come out of the $500 million a year Fannie and Freddie would kick in to an affordable housing fund that was part of an earlier GSE reform bill.
Lenders would still be limited to recovering 85 percent of the current assessed value of mortgage to be refinanced.
In the original version of the three little pigs, the wolf blows down the straw and wood houses, and eats the pigs. The brick house can't be blown down, the wolf tries to go down the chimney, the pig is ready with a stewpot & eats the wolf for dinner.
In the Barney video version of the three little pigs, the wolf blows down the straw and stick houses, and the pigs run for it and the brick pig opens the door and gives them safe haven and the wolf just gives up.
That pretty much summarizes modern attitudes and this "modern" housing bill.
Does this force lenders to reduce principal? I mean... Bernanke says that will work, and he's the chairman of the Fed... so why not force them to reduce principal?
[Congress could just temporarily change the rules on foreclosure to allow moderate-income homeowners facing foreclosure the option to stay in their home paying the fair market rent.]
I just recently worked with a homeowner who decided he didn't want to keep his home (too many high-ticket repairs, deferred maintenance never noted by his home "inspector").
He claims he was told by the foreclosure attorney that he would be receiving a letter in July, offering him the option of renting the home (mortgage is FHA-insured).
Matt CArter wrote, By the way, people realize the Fed could come out ahead in Bear Stearns deal, right?
That's not the question.
The question is whether
(a) the risk/return tradeoff is reasonable, and
(b) there weren't other mechanisms (e.g. seizing B.S. and placing it in receivership) that would safeguard the financial system just as well as what the Fed actually did without creating any moral hazard for the future.
cats and rats wrote, There's no difference between the 2 parties. Hacks to the biggest bidder, AKA: Lobbist. Whores, one and all. You really think that Obama is gonna be any better? He's just a young whore!
Sure, he's a whore, like most politicians, but in his case the chance we get into another war in the middle east is IMHO substantially lower than if McCain (shudder) takes office.
The difference between the Republicans and the Democrats is that the Republicans don't try to hide the fact that they're trying to benefit the wealthy. The Democrats hide behind the smoke screen of the foreclosed homeowner, the distressed student, etc. Meanwhile, the money continues to flow to the top 1%.
All the bailout action I've seen so far has been tailored so as to apply only to purchase-money mortgages -- i.e., so as not to bail out people who are in trouble because the refi'd out their equity and spent it on toys.
I suspect this bill, too, will be so tailored. Does anyone know the details?
Another thing I've noticed about many of the proposals is that in "recourse" states they would the risk that someone selling for less than the original mortgage would not be on the hook for the shortfall, so a likely side effect would be that people forced to or desiring to move for personal or career reasons would be much more willing to sell at actual market prices, rather than, for example, try to rent to wait for a market recovery to get them back to breakeven. That would hasten the decline of prices to affordable levels.
"Meanwhile, the money continues to flow to the top 1%"
A somewhat different 1%. Democrats really like attorneys! Republicans like oil companies and the investor class. I suppose you could argue that at least oil companies provide something useful to society. Attorneys - not so much. They consume.
I was wondering what they meant by "regulatory reform". It means we dump the risk on Freddie and Fannie, and when they're about to go under, the taxpayer can bail them out too!
If the financial industry wants a bailout, it should come with regulatory teeth to prevent this in future.
Not to worry, though- the financial industry can rest assured Congress will never demand any accountablity from them.
But in many cities today, house-price declines are so severe that potential buyers are staying on the sidelines, fearful of further collapse. The result is declines that are deeper than need be to restore affordability.
No they're not. Affordability will be restored when buying is cheaper than renting, as it's supposed to be. That's what will get people buying again, because it's the only economically sound reason to buy in the first place.
The unemployment measure is pretty much meaningless, because it doesn't consider people who've dropped out of the labor force.
It also doesn't count people who are still considered "employed", but who are making far less or no money - realtors, building subcontractors, shopkeepers, part-timers, etc.
And it doesn't count illegals who were never officially employed in the first place.
The core problem of the foreclosure crisis as I see it is that the Congress represents the Lenders
and in my case the federally chartered savings banks. The Office of Thrift Supervision stated to me in writing that they could nothing to help me when my mortgage holder of 7 years changed my original loan purpose which prevented me from refinancing my loan under banking regulation 12cfr564. This same Cleveland Ohio savings bank then rejected my refinance based on a flawed appraisal. The banks used its own appraisal (which had 9 violations of state and federal law) to reject my refinance of the loan balance to lower my monthly
payments. The OTS stated that there are no federal consumer banking regulations. This means that a mortgage borrower who has been harmed by a federally chartered bank has no recourse or protection from the federal government. Conversely, how many citizens can afford the creativity of an attorney to fight a foreclosure? How many hundreds of thousands of people in the USA have been able to fight their foreclosure? The Congress, protects the Congress, not the people they were elected by. The Congress has not passed any federal consumer banking regulations that would give the mortgage borrower a voice when he or she has been damaged
because the wealthy and powerful banks wont permit this to happen. The federally chartered
savings banks operate with absolute impunity. You might say of this of every Congress that
the government lives better than its people. When the State and the Federal Government stands with the Sheriff at your foreclosure sale selling your home of 7 years for pennies on the dollar, and this occurred, because of the actions of an unethical savings bank there is something seriously wrong. The only one that lives the American Dream are those who take advantage
of us that do not have the avenue of fair and legal recourse that the Congress has afforded the lenders.
Michael LittleBig POB 16588, Rocky River Oh 44116
Looking forward to those specifics...
Hope Maybe Later
No Hope for Bulls - market says goodbye with light volume shooting star reversal. GFY BULLS!
Daniel, they announce an agreement, but no details ... oh well.
Best Wishes.
again, those of us who are waiting for dumb-arses to default are paying the price...
Yeah!!!
Bailouts for everybody who made stupid decisions.
For those of us who didn't overbuy and didn't fall into the trap of low teaser rates, well we can all just go Cheney ourselves.
Somebody please explain to me again the point in being prudent and playing by the rules cause I really don't see the advantage in it anymore...
I don't think the market will like this news. It is not the full/complete bailout for homeowners they were hoping for. This is actually bad for Fnm and fre because they are shouldered with crappy mortgages where as before they used to be able to comb through the shit pile. Also we will get some price discovery on some of these non performing mortgages and homes. Watch out fnm and fre stockholders you are about to get diluted then crushed. Congress crushes FNM only to get stuck with their whole collateral of trillion dollars later.
OFHESOXLEY?
$300 billion here, $300 billion there. Pretty soon you're talking about a real national debt.
Short the hell out of Bucky. This will be currency devaluation at it's finest no doubt.
Woohoo. Tax away my down payment so these guys can keep the house I didn't buy and they can't afford!
All these "potential" bailouts just give homeowners and lenders hope to hang on.
It is so cruel. It's like the boyfriend who won't break up with his girl, knowing deep inside it will never work out. The girl's heartache will end up worse the longer it goes on.
The outcome can't be changed. Prices will revert to approx 3 times the income of the area. Some places are getting closer to that, others are still miles away.
Stop the false hope so that she (I mean...we) can get on with our lives.
Given the differences of opinion on this blog as to the causes, fixes, and extent of this problem....from people who care and/or are experts on this problem....I find it hard to believe that Congress can come close to a solution that actually helps.
It would be a first.
Nice analogy doom
Uh... Didn't GWB say he'd veto this thing?
Where do I apply for a (bailout) (handout) (stolen dollars from other taxpayers) ... to finance my move to Vanuatu ?
I hope that sob veto it! Man, this would suck if it passes. GRR!!!
What wii this one be called?
"Homeowner Freedom Package"
"Project Surfacing Submarine"
What happened to the 15% off from current appraisal haircuts to the current lenders on existing mortgages for refis?
Maybe we need a bailout bill for yatch owners:
Times Are Tough, Except in Repo Business
By DAVID STREITFELD 4:21 PM ET
The recreational boating industry has faltered amid the housing slump and one of the largest boat repo operations in the country is repossessing nearly a boat a day.
Regards,
Something tells me 300 billion isn't going to be enough.
Wait a minute, didn't somebody at FHA say that this bill is not a good idea?
Oh vey...forgot the link...that was from the New York Times..!
WSJ link is wrong.
Well, the federal government has been in housing for 40 years, and has been a cause and fixer of real estate bubbles.
Who is to blame? I would put the blame on this flip flopping economic system we have. The ides that government is this way for a while, then that way for a while is like a bubble pump.
"I find it hard to believe that Congress can come close to a solution that actually helps"
Which part of LENDER BAILOUT don't you understand?
This has ZERO to do with benefit to those with mortgage obligations. They don't have lobbyists working over members of congress. If anything it might somehow get them to pay, which only benefits the lenders.
"Rich people march on Washington everyday"
-I. F. Stone
thnk the shrub will veto it?
"Rich people march on Washington everyday"
-I. F. Stone
LOL! Very apt.
Lovely. Pandering for votes is what this is all about. Can you imagine the money being spent by lobbyists in Washington to get this thing signed into law. Simply disgusting. Bail-out after bail-out at the taxpayer's expense.
"Who is to blame? I would put the blame on this flip flopping economic system we have. The ides that government is this way for a while, then that way for a while is like a bubble pump."
I blame Satan and his evil ways.
I certainly hope Bush will veto it, as he has promised to. I'd guess this is the first salvo in the bailout partisan blame-game, which will not end until the next election is done, after which Congress will be able to enact a full bailout, and offload all the speculative losses from the irresponsible people onto the responsible taxpayers.
I would seriously go for 4 more years of Bush, if that were possible, just to avoid the inevitable bailout and all that it implies. Weighed against all the other bad things Bush would do, I think it would be an overall win; and that's really a sad commentary on how bad the current candidates are.
I really want (how could I change that to need?) a 30 year fixed 4% mortgage. Although if pushed I would accept 3%. Do these new proposals drop the interest rates to something reasonable?
Trader hat on, I think this is the news you sell.
Less significant are the details. Most significant is whether or not these clowns have enough votes to override Bush's veto.
CR,
The WSJ link points back at CR.
When you look at the $300 billion guarantee being discussed, I really wonder why people hyperventilated so much over the risk posed by the $30 billion BSC deal. At least in that case, JPM was going to take the first billion loss.
I bet we could sell Yellowstone and Yosemite for $300 billion to the Chinese to cover the losses. No problem.
"The bill addresses the root of our current economic problems - the foreclosure crisis - by creating a voluntary initiative at no estimated cost to taxpayers which will help Americans keep their homes," Christopher Dodd, Democrat chairman of the Senate Banking Committee, said in a statement.
This is true. The cost to taxpayers has not yet been estimated. But it's gonna be GINORMOUS!
at least they got the roman numerals in the correct order.
President Bush will sign ASAP. He will not take the blame for supposedly kicking people out of their homes.
.
I would seriously go for 4 more years of Bush, if that were possible, just to avoid the inevitable bailout and all that it implies. Weighed against all the other bad things Bush would do, I think it would be an overall win; and that's really a sad commentary on how bad the current candidates are.
The only reason Bush would go ahead and veto this is because he is a lame duck with nothing to lose. If he were up for election again this Fall he'd likely sign it.
Oh, and given the damage this idiot has done already, I really wouldn't want to give him 4 more years in which to get us mired down in Iran.
OT, sort of. The shrub is angry about NBC's description of the economy in recession among other things and his legal counsel sent NBC a letter...
[Lastly, when the Commerce Department on April 30 released the GDP numbers for the first quarter of 2007, Brian Williams reported it this way: "If you go by the government number, the figure that came out today stops just short of the official declaration of a recession."
The GDP estimate was a positive 0.6% for the first quarter. Slow growth, but growth nonetheless. This followed a slow but growing fourth quarter in 2007. Consequently, even if the first quarter GDP estimate had been negative, it still would not have signaled a recession neither by the unofficial rule-of-thumb of two consecutive quarters of negative growth, nor the more robust definition by the National Bureau of Economic Research (the group that officially marks the beginnings and ends of business cycles).
Furthermore, never in our nation's history have we characterized economic conditions as a "recession" with unemployment so low in fact, when this rate of unemployment was eventually reached in the 1990s, it was hailed as the sign of a strong economy. This rate of unemployment is lower than the average of the past three decades.
Are there numbers besides the "government number" to go by? Is there reason to believe "the government number" is suspect? How does the release of positive economic growth for two consecutive quarters, albeit limited, stop "just short of the official declaration of a recession"?]
Michael Calderone's Blog: White House to NBC: Report was 'misleading and irresponsible' - Politico.com
In a second letter, the president's legal counsel also asked Brian William's to refer to the president as "the Great George W. Bush" and to stop refering to the US as "America" and to call it "'Merica."
Oh, and given the damage this idiot has done already, I really wouldn't want to give him 4 more years in which to get us mired down in Iran.
skeptictank | 05.19.08 - 6:53 pm | #
It doesn't take four years to do that - four hours of bad policy could leave us mired for four years..
"I am mad as hell and I am not going to take this anymore!" -Network
I am seriously as sick of this crapola as I can get. The senate and house, who obsess with opinion polls, ignore them this time to bailout wall street and the banks. No public debate. No vote. Nada. Is there some way to get the bailout bills on every state election ballot in November? I mean something along the lines that you would need 50% plus states to go along with it? Is there anything we can do to stop this insanity?
Calgon take me away!
Don't worry, if Bush vetos it, by the time the next Prez and Congress is installed, whatever is gonna happen will have happened already, and they are going to need to go into picking up the pieces mode.
Shrub will veto it but Congress probably has the votes to override it. The Dems are finally calling the shots, --it's like the final days in Hitler's bunker on Republican side of the aisle and they know it.
"Shrub will veto it but Congress probably has the votes to override it. The Dems are finally calling the shots"
And, that's a good thing? There's no difference between the 2 parties. Hacks to the biggest bidder, AKA: Lobbist. Whores, one and all. You really think that Obama is gonna be any better? He's just a young whore!
Cat and Rats
I never said they were any better--just the way it is right now,
And to prove your point, Dean Baker writes about this "Democratic" bailout bill"
"Congress has shown little interest in ensuring the new guarantee prices reflect fundamentals, making it likely many of the people "helped" under the program will end up facing foreclosure a second time. However, to make matters worse, they came up with the idea of financing the plan by taking away a stream of funding that had been dedicated to help low-income renters.
That's right; Congress wants to take away money from low-income renters to help bankers that made bad loans in the housing bubble. As we all know, when the banks are in trouble, it is not the time to talk about the free market.
The real painful part of this story is it would be very easy to help the real victims in this story: the low- and moderate-income homeowners, who were suckered into buying homes at bubble-inflated prices with bad mortgages. Congress could just temporarily change the rules on foreclosure to allow moderate-income homeowners facing foreclosure the option to stay in their home paying the fair market rent.
This would provide these families with housing security. At least as important, it is likely to result in many of these families remaining in their houses as homeowners, since banks will have a strong incentive to negotiate new terms on mortgages in order to avoid becoming landlords. And the best part of this story is that families would benefit from this change the moment Congress passed the law. There is no need for a new bureaucracy or any taxpayer dollars.
That is what Congress would do if it was serious about helping families facing foreclosure. Unfortunately, the banks seem to rank higher in its concerns - remember, just three years ago, it made the bankruptcy laws more stringent (applied retroactively), to boost bank profits.
Apparently, the banks rank so high Congress is even prepared to take money away from low-income renters to meet their needs. Stealing candy from babies would be a step up for this crew."
Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer
The Democrats pig out at the same trough as the Republicans(sorry for the long post)
"I would seriously go for 4 more years of Bush, if that were possible, just to avoid the inevitable bailout and all that it implies. "
So you're willing to let this mass murderer start another 2 or 3 illegal wars of aggression against countries that are no threat to the US, so long as that prevents this bailout?
Under the Frank/Dodd FHA expansion plan, most of the cost of providing $300 billion in additional loan guarantees would be covered by mortgage insurance premiums. CBO estimates taxpayers would be on the hook for $1.7 billion in losses if the program funded 500,000 refis.
Under the Dodd/Shelby compromise, Fannie and Freddie would cover any losses instead of taxpayers. The money would come out of the $500 million a year Fannie and Freddie would kick in to an affordable housing fund that was part of an earlier GSE reform bill.
Lenders would still be limited to recovering 85 percent of the current assessed value of mortgage to be refinanced.
There are some more links here:
Daylight for FHA plan in shadow of veto threat? | Real Estate and Technology News for Agents, Brokers and Investors | Inman News
By the way, people realize the Fed could come out ahead in Bear Stearns deal, right?
Yahoo! Personal Finance: Calculators,Money Advice,Guides,& More
In the original version of the three little pigs, the wolf blows down the straw and wood houses, and eats the pigs. The brick house can't be blown down, the wolf tries to go down the chimney, the pig is ready with a stewpot & eats the wolf for dinner.
In the Barney video version of the three little pigs, the wolf blows down the straw and stick houses, and the pigs run for it and the brick pig opens the door and gives them safe haven and the wolf just gives up.
That pretty much summarizes modern attitudes and this "modern" housing bill.
Does this force lenders to reduce principal? I mean... Bernanke says that will work, and he's the chairman of the Fed... so why not force them to reduce principal?
This is the very last chance the shrub has to do anything useful for his entire administration. I doubt there are enough votes to overturn a veto.
[Congress could just temporarily change the rules on foreclosure to allow moderate-income homeowners facing foreclosure the option to stay in their home paying the fair market rent.]
I just recently worked with a homeowner who decided he didn't want to keep his home (too many high-ticket repairs, deferred maintenance never noted by his home "inspector").
He claims he was told by the foreclosure attorney that he would be receiving a letter in July, offering him the option of renting the home (mortgage is FHA-insured).
Can't wait to see my copy of that.
Matt CArter wrote, By the way, people realize the Fed could come out ahead in Bear Stearns deal, right?
That's not the question.
The question is whether
(a) the risk/return tradeoff is reasonable, and
(b) there weren't other mechanisms (e.g. seizing B.S. and placing it in receivership) that would safeguard the financial system just as well as what the Fed actually did without creating any moral hazard for the future.
barely quoted, Furthermore, never in our nation's history have we characterized economic conditions as a "recession" with unemployment so low...
The unemployment measure is pretty much meaningless, because it doesn't consider people who've dropped out of the labor force.
cats and rats wrote, There's no difference between the 2 parties. Hacks to the biggest bidder, AKA: Lobbist. Whores, one and all. You really think that Obama is gonna be any better? He's just a young whore!
Sure, he's a whore, like most politicians, but in his case the chance we get into another war in the middle east is IMHO substantially lower than if McCain (shudder) takes office.
The difference between the Republicans and the Democrats is that the Republicans don't try to hide the fact that they're trying to benefit the wealthy. The Democrats hide behind the smoke screen of the foreclosed homeowner, the distressed student, etc. Meanwhile, the money continues to flow to the top 1%.
All the bailout action I've seen so far has been tailored so as to apply only to purchase-money mortgages -- i.e., so as not to bail out people who are in trouble because the refi'd out their equity and spent it on toys.
I suspect this bill, too, will be so tailored. Does anyone know the details?
Another thing I've noticed about many of the proposals is that in "recourse" states they would the risk that someone selling for less than the original mortgage would not be on the hook for the shortfall, so a likely side effect would be that people forced to or desiring to move for personal or career reasons would be much more willing to sell at actual market prices, rather than, for example, try to rent to wait for a market recovery to get them back to breakeven. That would hasten the decline of prices to affordable levels.
"Meanwhile, the money continues to flow to the top 1%"
A somewhat different 1%. Democrats really like attorneys! Republicans like oil companies and the investor class. I suppose you could argue that at least oil companies provide something useful to society. Attorneys - not so much. They consume.
I was wondering what they meant by "regulatory reform". It means we dump the risk on Freddie and Fannie, and when they're about to go under, the taxpayer can bail them out too!
If the financial industry wants a bailout, it should come with regulatory teeth to prevent this in future.
Not to worry, though- the financial industry can rest assured Congress will never demand any accountablity from them.
NYT gets it wrong:
But in many cities today, house-price declines are so severe that potential buyers are staying on the sidelines, fearful of further collapse. The result is declines that are deeper than need be to restore affordability.
No they're not. Affordability will be restored when buying is cheaper than renting, as it's supposed to be. That's what will get people buying again, because it's the only economically sound reason to buy in the first place.
EDITORIAL; Teeing Up the Next Mortgage Bust - NY Times
The unemployment measure is pretty much meaningless, because it doesn't consider people who've dropped out of the labor force.
It also doesn't count people who are still considered "employed", but who are making far less or no money - realtors, building subcontractors, shopkeepers, part-timers, etc.
And it doesn't count illegals who were never officially employed in the first place.
The core problem of the foreclosure crisis as I see it is that the Congress represents the Lenders
and in my case the federally chartered savings banks. The Office of Thrift Supervision stated to me in writing that they could nothing to help me when my mortgage holder of 7 years changed my original loan purpose which prevented me from refinancing my loan under banking regulation 12cfr564. This same Cleveland Ohio savings bank then rejected my refinance based on a flawed appraisal. The banks used its own appraisal (which had 9 violations of state and federal law) to reject my refinance of the loan balance to lower my monthly
payments. The OTS stated that there are no federal consumer banking regulations. This means that a mortgage borrower who has been harmed by a federally chartered bank has no recourse or protection from the federal government. Conversely, how many citizens can afford the creativity of an attorney to fight a foreclosure? How many hundreds of thousands of people in the USA have been able to fight their foreclosure? The Congress, protects the Congress, not the people they were elected by. The Congress has not passed any federal consumer banking regulations that would give the mortgage borrower a voice when he or she has been damaged
because the wealthy and powerful banks wont permit this to happen. The federally chartered
savings banks operate with absolute impunity. You might say of this of every Congress that
the government lives better than its people. When the State and the Federal Government stands with the Sheriff at your foreclosure sale selling your home of 7 years for pennies on the dollar, and this occurred, because of the actions of an unethical savings bank there is something seriously wrong. The only one that lives the American Dream are those who take advantage
of us that do not have the avenue of fair and legal recourse that the Congress has afforded the lenders.
Michael LittleBig POB 16588, Rocky River Oh 44116