I believe the technical term is "homeower".

No EESA or Financial Stability Plan Money: The $200 billion in funding commitments are being made under the Housing and Economic Recovery Act and do not use any money from the Financial Stability Plan or Emergency Economic Stabilization Act/TARP.

It's almost like the money is free!

Enabling Up to 4 to 5 Million Responsible Homeowners to Refinance

Tim and Mr Potatoe Head | 02.18.09 - 12:52 pm | #

He must be using the same math to figure out how many jobs his stimulus program will create.

"This initiative will go solely to helping homeowners who commit to make payments to stay in their home "

The shackle clause.

People wouldn't have been able to "over-extend" with risky mortgages IF regulations were kept in place. The banks demanded deregulation and Greenspan introduced alphabet soup vehicles.

Throw another Pony Steak on the barby, mate!

Which part of this plan involves backdoor cash injections for Goldman Sachs?

rsadge writes:
acorn is getting the 2 billion-maybe we should have them do the 2010 census

Go shit up another blog with this paranoid android crap.

since acorn were so sucessful with their voter sign up its a no brainer to have them do the census

FDIC - YESSSSSSSSSS

I'm so glad it worked out for her.

someone needs to walk up to the mike...quietly put a hand over it and say the following words:

The election was in November...you ran against John McCain.....you were elected in a landslide. You are the President now. You won.....no...really you did. Now act like you are president instead of just being happy you are.

Ciao
MS

Great news, FFDIC.

So we will go from 10yrs of being Japanese to 20yrs. Yes I can see were this a real Help. I truely thankful I'm a renter.
jo6pac

there is voter fraud on the left and right no big deal move o

Uncle Ben getting ready to hand out some heroin. Street name TALF. Watch the markets bounce to a strong close.

Come on.. we all know that lending to poor people in the US caused a worldwide financial crisis

Those poor people screw everything up! Look, that one has four kids and they all collect welfare! What? Government services providing birth control? PREPOSTEROUS. Just stare over in that direction while I cart away this wheel-barrow full of money...

I believe the technical term is "homeower".

Solvency Theatre writes:
How is my neighborhood hurt when a debt junkie moves out and a prudent buyer moves in? Sometimes there is addition by subtraction.

It's called comps, and any homeowner dreads it. Someone on your block sells his 1 million dollar mansion for 500k, and suddenly your house is worth 500k too, not for any reason that is fair, but because no bank will make a 1 million loan on a house whose neighbor just cleared for 500k. Thus, one foreclosure on your block SCREWS your property values.

Looks like California is out of luck, again.
-----
exactly right. this plays to other parts of the country.
joe shmoe | 02.18.09 - 1:06 pm | #

California is not "in play."  Leader O could have picked a half dozen more distressed regions in California but didn't.  Why?  Look at the California Congressional delegation.  Now look at the Arizona Congressional delegation.  The DNC should be billed for this junket. 

Far more important; big shout out to FFDIC and Angela for continued good news. 

Which part of this plan involves backdoor cash injections for Goldman Sachs?

The $200B cash injection to FRE/FNM is a giveaway to the MBS holders, as the taxpayers again step into the first loss position.

sounds like a cds to me

rsadge don't you have some meth to cook

in my pharmacy

75 Billion will morph into 500 Billion by next year.

SAVE THE VICTIMS!

MAKE THOSE EVIL BANKS PAY!

PUNISH THE SAVORS!

VIVA HUGO CHAVES!

.

The Dow can now continue to its destination of 3000, as Mr. Average Investor realizes that the stimulus, TALF, TARP, Housing Plan, and any other plan is not going to help - and will probably make everything worse.

Holders of mortgages modified under the program would be provided with an additional insurance payment on each modified loan, linked to declines in the home price index......

Sounds like a cds to me

these currency swaps with other countries can cause us problems

New York to Spend $45 Million to Retrain Laid-Off Wall Streeters

I had to laugh at this bit...

“When it does, cities around the world will compete to capture the jobs it brings,” he said. “In New York City, we’re not waiting for that day to come. Instead, we are taking aggressive steps to put the city in the best position to capture growth, and we’re doing it by promoting one thing more than any other: innovation.”

Yes, like all of those "innovative" financial products invented on Wall Street already.

“We have a substantial number of very talented people coming out of Wall Street,” Mr. Pinsky said. “Where do these people go? Do they stay in New York or go elsewhere?”

Still puzzling over what exactly is meant by "talent" here.

I believe the technical term is "homeower".
\t Nemo | 02.18.09 - 1:09 pm | #

Homemoaner.  Didn't you read the CR FAQ page? 

Rob Dawg please expand on your last comment...
\t Tim and Mr Potatoe Head

California has effectively been a single party State for some time.  At the Electoral College level it has been nothing but a source of campaign funding for efforts elsewhere in competitive States.  That's why California has seen 20 of the last 21 years of a negative balance of payments with the rest of the nation and disproportionate disinvestment at the Federal level. 

Don't get me wrong.  It isn't which party so much as it is one party.  Were CA singularly Repulican reliable the list of problems would be different but the results would be identical.  

CR SEZ:

Exactly. That is my complaint. These buyers were really speculators using excessive leverage and affordability products ... why should we bail them out?

Its that, but more for me. I saved and invested in assets that haven't depreciated like housing, hoping to someday own another home. This plan just pushes my horizon out farther by propping up a stupidly high "equilibrium" in the housing market.

Plus, I get the added bonus of having to tear my hair out by trying to hedge simultaneously in two different directions because to date the Treasury and the Fed have been like watching "Sybil" and "Groundhog Day" combined, over and over again. Nobody knows what course they'll settle into...

Well, except for one sure bet: The best course will only be chosen after all other unreasonable options have been exhausted.

I take it, then, if I specuvested by fraud, and still claim my specuvest is my "home" I still can qualify if I know the ropes...because, you know, the gov't will SOOOOOOOO be able to ramp up oversight quickly.

BTW it's been like 7 years since the TSA and I still get through walk on screening without following the rules.

Nostrovia,

Is anyone else bothered by the contradiction that the Feds are simultaneously promoting "affordability" and "price stability" at the same time?

It's affordability if you already own the home. If you're a patient renter, then you're screwed. Unless your property is foreclosed upon; then there's $2B for something, but I don't know what.

Still puzzling over what exactly is meant by "talent" here.

Before they went to wall street, they were biologists, physicists, and computer scientists. They just made the rational decision and chose to earn 300k per year and compete with WASPY harvard grads rather than 50k competing with indian subcontractors.

One final note. I'm currently reviewing the internal files of a trading house that put together toxic securities, and I just ran into an email with beautiful pictures of large, green, idyllic swaths of land in some south american country. I climb up the email chain to figure out why this is on a trader's computer, and discover that they're all buying up land in south america to move to. I threw up a little in my mouth and my soul died. The end.

Geez Hoops, Hoocoodanode? Then can join GW down there...

The Delphi Technique being implemented by BO's handlers is to counteract such think tanks like our own. They think they are so smart, but how do the counteract the affect of BO's initials?

Delphi Technique
The Delphi Technique. What Is It?

hey might as well institute a highly progressive IQ tax and be done with it.
Rob Dawg | Homepage | 02.18.09 - 1:05 pm | #

I like it!  Kind of the opposite of the lottery.  Now if we could just find a way to tax good intentions. 

Gold and Silver laughing at you BB...

Ciao
MS

And the worst you've ever known are probably rating agency goons... it's how the model works. Make sure that anyone competent or moral has a place in the scheme, and leave the incompetent remnants to regulate you...

FFDIC, good to hear, and I wish her a speedy recovery. 

FFDIC, glad to read your daughter is doing better!

On to relatively trivial stuff:

MBIA shifts bond insurance business to new company
Yahoo! 404 - Page Not Found

some key quotes:

is separating its municipal bond unit into a new operation as it looks to rebuild a business shattered by the subprime mortgage crisis

Does anybody know how much municipal debt was issued in 07 and 08? This last quote makes me curious about whether the bond market has learned to live without bond insurance. Perhaps, proper due dilligence has shown pricing the bond better yields better returns over bond+bond insurance package. I gues what I'm asking is has the bond insurer fiasco increased discipline in the muni bond market?

Gavshire, 4/10.

Nobody is taking any money, they're printing it. I'd adjust the rant to reflect that, instead of the inaccurate "OBAMA IS A TAX AND SPEND SOCIALIST" meme. Print and spend, or borrow and spend, those are our two national party choices.

Thank god there's no cram down - we'd pay for it.

If the banks made so many bad loans without due diligence and with insufficient reserves against default, they can just write down the principle themselves.

That's the cramdown part.

CRE collapse will be back in focus as we approach 3/15! The next GGP deadline day.

"§ “Pay for Success” Incentives to Servicers: Servicers will receive an up-front fee of $1,000 for each eligible modification meeting guidelines established under this initiative."

Glod...the boiler room guys have got to be DROOOLING!

Nostrovia,

Solvency Theatre,

"New York to Spend $45 Million to Retrain Laid-Off Wall Streeters

How expensive is the training to fill in potholes?"

It's for wardrobe training.

Nostrovia,

FFDIC - thanks for the update, glad to hear your beloved daughter is making steady progress. Will continue sending best wishes your way.

o/t - Gasparino is reporting "Goldman Sachs Partners Borrow to Cover Margin Calls"

source - Goldman Partners Borrow to Cover Margin Calls - CNBC

(Angela is out of ICU and in a regular room. I had my first phone conversation with her this morning and this evening will be the first time I have seen her alert as I didn't go yesterday. She continues to have plasma exchanges which seem to be what saved her life. Thank you immensely for your support, prayers, concern and blogger love during this difficult week and a half.)
FFDIC | 02.18.09 - 1:04 pm |

Wh00t!

(thanks for the repost dryfly

Nostrovia,

Note the subtle difference in "affordable" - they used to talk about affordable houses, now they talk about affordable mortgages. The inference is that you'll never pay off the mortgage so you are in effect renting.
Solvency Theatre | 02.18.09 - 1:45 pm | #

We have a winner. The banks are getting the money for next to nothing, extending the payments to make them "more affordable" will net the banks the same if not more than the previous payments. Add to it the "incentives" aka bribery and we know which side the O is on.

Speculators/flippers (i.e., anyone who owned more than one home at a time in the last 7 years) should be excluded entirely from the program (not just excluded with respect to their 2nd, 3rd, 4th, etc. homes). We shouldn't be allowing the Casey Serins of the world to pick a primary residence among their many homes and receive government assistance as a "homeowner".

Recession will be worst since 1930s: Greenspan
NEW YORK (Reuters) – Former U.S. Federal Reserve Chairman Alan Greenspan said on Tuesday the current global recession will "surely be the longest and deepest" since the 1930s and more government rescue funds are needed to stabilize the U.S. financial system.
[...]
"To stabilize the American banking system and restore normal lending, additional TARP funds will be required," Greenspan said.."
Greenspan, a proponent of self-regulation, said he was "deeply dismayed" when in August 2007 the premise that firms had the enlightened self interest to monitor their own risk exposure "failed."
"I see no alternative to a set of heightened federal regulatory rules for banks and other financial institutions," he said.... he still believes self-regulation is a first line of defense for market effectiveness.

"We need not rush to reform"

Someone put that old fool Greenspan in a straight jacket and haul him off to The Asylum for the Insane

Awkward?

Several Goldman Sachs partners have leveraged their Goldman Sachs stock to buy alternative investments such as hedge funds & private equity, and they have done so through their Goldman Sachs brokerage accounts.

But Goldman stock [GS 83.71 -2.01 -2.34%) has declined in value by more than 50 percent since last spring, meaning that Goldman Sachs is in the awkward position of making margin calls on its own partners, who can't meet those calls because their alternative investments are underwater and they don't have enough cash on hand...

I thought Michael was the eldest...

Anyway....

MS,

People won't be able to manufacture hardship fast enough to outrun real hardship...

Um....

I'm not sure that's a rebuttal, a good thing, or a bad thing.

Nostrovia,

The cynic in me asks how income will be calculated for couples. I'm scared by the use of a singular pronoun in this statement.

§ A Shared Effort to Reduce Monthly Payments: For a sample household with payments adding up to 43 percent of HIS monthly income, the lender would first be responsible for bringing down interest rates so that the borrower's monthly mortgage payment is no more than 38 percent of his or her income.

If the mortgage is in the name of just one spouse, what happens then? Can servicers be counted on to track down all sources of income for a household?

THE major problem here with any program is that it miosses the point: mots people bought not the ideal home but the one that offered a trading opportunity and that includes not JUST speculators. Indeed these people are now trapped inside these houses in places that they would probably not otherwise chosse to be. Tough luck right. No actually they have a rational decison to make lock themselves in or exercise their free put. The decision here remians obvious. Krugman said on TV yesterday that trying to stop house prices from falling is just stupid. Extending out a payment schedule or even a margin principal shave serves only to accelerate the price reduction for everyone else on a comps basis. How does this not fuel a cviscious cycle?

"Comrade Misean is Dope writes:
I thought Michael was the eldest...

Nostrovia,
Comrade Misean is Dope | 02.18.09 - 1:56 pm |"

A palm reader once told me I am a very old soul, for whatever that's worth.

OMG, this is freakin hilarious...warning vulgar language but oh if the news was reported like this..
YouTube - Sony Releases Stupid Piece Of Shit That Doesn't Fucking Work

Curious,

"Can servicers be counted on to track down all sources of income for a household?"

Sure. The gov't is a fantasy edifice for the sheeple. It just prints words on a piece of paper and --- viola --- with the wave of a beureaucratic wand it happens.

I think they have a button too, which plays Jean Luc Picard saying "Make it so." just to make it all official sounding.

Nostrovia,

Michael writes:
Well at least MBIA is getting a nice 31% bump. Looks like some bond holders are very happy right now.
MBIA INC $4.59 $1.11 %31.90 23,517,677 13:27

I wonder how the holders of the NEwco when it is spun into seperate entity will feel about being saddled with the losses of the badco. Can you say lawsuits...splitting things into 2 was a structured finance tactic that I thought had been banished to the dustbin. Apparently not. Alchemy is still en vogue

Joe while I agree with much that you write the above simply shows to me that most people abandon their idealogical trappings when the world is falling apart around them.
Pissed off in California | 02.18.09 - 1:29 pm | #

Atheist, meet your foxhole.

I resent that. Renters were not irresponsible with their money and aren't crying for a bailout.
Anonymous | 02.18.09 - 1:59 pm | #

Correct.

Renters should not be grouped with these irresponsible borrowers.

Every bailed-out homedebtor qualifying for one of these programs should have a permanent asterisk on their credit history, with a note that says "bailed out by the gov't".

Every bailed-out homedebtor qualifying for one of these programs should have a permanent asterisk on their credit history, with a note that says "bailed out by the gov't".
ztexas | 02.18.09 - 2:04 pm | #

Might make them even more attractive since we all know once is never enough.

-- Every bailed-out homedebtor qualifying for one of these programs should have a permanent asterisk on their credit history, with a note that says "bailed out by the gov't" --

Just call it an assisted bankruptcy.

In some upbeat news, the US Mint has issued four more pennies.

Just a hundred trillion more and we'll be out of this hole. Take that, doomers!

Lincoln's penny gets a new look -- actually four new looks | Top of the Ticket | Los Angeles Times

CR: will participation and refi turn mortgages into recourse v nonrecourse?

Part 2) isn't going to fly. It's too complex and impossible to administer. Given Timmay's lack of detail last week, I expect Part 2 of this proposal is a trial balloon that will be killed off, and all mortgage modifications will ultimately occur via Fannie and Freddie. Commercial banks will unload underwater mortgages to them at quasi-market rates, creating the "bad bank" and effectively nationalizing the mortgage mess rather than the commercial banks themselves.

IN RE TRUMP ENTERTAINMENT GROUP, INC.
(U.S. Bankruptcy Ct., Dist. of N.J., Feb. 17, 2009) - Donald Trump's casinos, operating under the Trump Entertainment Group of companies, filed for Chapter 11 bankruptcy protection today. The bankruptcy petition lists the casino group's assets as $10 - $50 million, with estimated liabilities of $100 - $500 million. According to an attached exhibit, on December 31, 2008 Trump casinos had approximately $1.74 billion in debt and assets of $2.06 billion. Secured creditors include Donald Trump, Morgan Stanley & Co., Franklin Mutual Advisors, LLC, and New York hotel developer Sam Chang

In case anyone missed it F&F are becoming the "Bad Bank" with a $900 million credit limit and authorization to buy up all these underwater mortgages.

Is there anyone reading this who believes that they personally will be helped by this plan? I know I won't. And I've read most every post in this thread and haven't seen anyone say it will help them. If this plan will help you, please let us know. Feel free to post as a sock puppet if you don't want to give yourself away.

Also let us know: if this plan will help you, putting aside your self interest, do you think this is a good idea?

NateTG(Unrated) writes:
\t-- Every bailed-out homedebtor qualifying for one of these programs should have a permanent asterisk on their credit history, with a note that says "bailed out by the gov't" --

Just call it an assisted bankruptcy.
NateTG | 02.18.09 - 2:05 pm | #
-------------------------------------------------------------------------------------
Not to rip on you Nate, but you're focused on the wrong thing here.
"Credit History"???  Seriously?  You're worried about their credit?

People need to realize that the fool's errand of maintaining a good credit score is a thing of the past.  Companies like Fair Isaac, who in prior years put the fear of god in people, could very well become irrelevant.

For the foreseeable future, we will see a shift in values.  A good credit score will be far less important than a bank account and real assets that are owned outright. 

These people that deserve to have their credit tarnished...well, they have bigger problems.  Like the anchor currently tied around their necks.

Loudocracy, I'm trying to figure that out now. Seriously, mine would be an easy fix, take my 10.22% mortgage from hell and turn it into a 30 year fixed rate at even 5 or 5.5% and I'm good...

Nobody in Hawaii -

CNBC just broadcast them

Glad FFDIC's daughter is better.

It is sooo obvious. Nobody, including lenders can sell property for more than what it is worth. Before foreclosing, why not go the cramdown route? To the current value?

Here, that would mean often 50% off. A reworked mtg might mean a payment of half or less (absent taxes and insurance) and there are people who can pay that. How about a pilot program? I volunteer the Miami area.

There is a downside of ruined houses and banks making even less money remember. And months to years of sitting on the mkt, and broker's commissions.

The 5% negative GDP and 8.8% unemployment is their max projection, after chopping off the worst one, according to Liesman. They expect unemployment to crest in '09, and creep back in 10 and 11.

The 5% negative GDP and 8.8% unemployment is their max projection, after chopping off the worst one, according to Liesman. They expect unemployment to crest in '09, and creep back in 10 and 11.
TM | 02.18.09 - 2:15 pm | #

Right, because computer models have done so well at forecasting this bear.

Fed minutes:

http://federalreserve.gov/newsevents/press/monetary/fomcminutes20090128.pdf

Kristina can be an honorary Miamian for the purpose of the pilot program.

3% IO and a stripped 2nd would work for me! lol. like THATs gonna happen.

The Fed minutes have a lot of talk about inflation and money supply targeting. This is aimed at all the bond market vigilantes who think the unprecidented expansion of the Fed's balance sheet is highly inflationary. It's another attempt at jawboning down treasury rates. Too bad supply is going to swamp any jawboning, until they actually start buying.

I can understand helping homeowners, but $2B to help renters whose houses have been foreclosed upon! What are they going to do, help them find a new place to live and rent a moving company?
Basel Too | 02.18.09 - 1:05 pm | #

That would be a good and decent thing to do, after all it is hard to find a more blameless victim in this mess than someone who decided to rent a house, only to be kicked out becuase the landlord didnt pay the mortgage.

Loudocracy,

My youngest sister probably would benefit from the program based on the details I have seen. She and her husband purchased a home last Spring. I know some people that are definitely underwater here in CT, but I wonder if they actually qualify (their incomes may be too high).

Consider a family that took out a 30-year fixed rate mortgage of $207,000 with an interest rate of 6.50% on a house worth $260,000 at the time.

Looks like California is out of luck, again.