Skip to comments.President Obama to Announce Major Revamp of Home Lending Program, HARP
Posted on 10/24/2011 8:17:51 AM PDT by ColdOne
Las Vegas Seeking to breathe new life into a sagging economy, President Obama will attempt an executive branch rescue of homeowners trying to refinance underwater mortgages, with a new initiative that lets people with little or no equity get a better interest rate at a reduced cost.
The initiative, the first in a series of announcements expected this week by the president, applies to homeowners with federally guaranteed mortgages who are current on their payments.
The revamped Home Affordable Refinance Program, which aims to avert foreclosures, is expected "to encourage new, lower-cost loans" to more homeowners who are paying more than the value of their properties, a senior administration official said ahead of Obama's Monday announcement.
The three-year-old Home Affordable Refinance Program was supposed to allow refinancing for up to 125 percent of a home's value on mortgages owned or guaranteed by Fannie Mae or Freddie Mac, but has been stuck on tight eligibility rules, including excluding people with high credit scores or other attractive risk offers.
(Excerpt) Read more at foxnews.com ...
Let’s just make MORE bad loans!!!
It worked so well the first time.
And the Constitutional authority for this is... where?
who will pay for the losses the banks and mortgage companies incur?
Of course the Takers will love it and that buys 0dumbo votes
Maybe i should quit paying my mortgage too
Few thar be who learn in time to keep deys $*!*hooks to demselves!
Actually he said he was revamping HAARP.
an “executive branch rescue”
more legislating from the offices of Jarret Plouffe Axelrod Inc
This fix is illusory. In all fairness, someone who is current on their mortgage, and has been that way historically, is unable to refinance at the now low rates because the appraisal will show they are underwater (debt more than value of home). While this allows them to refinance at lower rates, it doesn’t address the real problem. As long as these people will stay in the house for many years, their debt will ultimately be less than the value via amortization.
The real problem is those that don’t pay. I know, the big bad banks made them sign those notes and take all that money, but they are dumb and didn’t know what they were doing. In the meantime, they are living rent / mortgage free and the courts, state governments and the feds are protecting them. As a lender, you simply can’t foreclose in any reasonable time frame.
The answer; give the holdover $2,500 (you pick a number) to vacate and have money to put down a deposit on a rental. Sell the now empty house to a qualified buyer at market prices and move on. The lender is taking the hit anyways; the quicker the better. Sure, this isn’t fair to the people who pay; but it is the only way to get the housing industry bottomed out and moving again.
Filed with BO’s birth certificate and selective service registration
Repeating the same failed socialist BS will lead to the same results, it is the definition of insanity but socialism is insanity.
Ron, we need you!!!! On second thought, you are in a much better place right now. God bless you for being with us when you did. ES
In your plan you say give the holder $2500 dollars to vacate , then sell the house at market Prices.
That idea doesn’t make sense to me.
Why not just write off the present mortgage, have the house appraised and let the present occupant buy it again at market price, if he can make the payments?
Sooner or later, everybody decides they can run the show.
I agree - and hell, the $2500 payout would be a lot cheaper than what they’ve been doing.
Well, if you’re presuming that the people who qualify aren’t paying, the occupant won’t qualify for a new loan.
What you’re referring to would be a plan to simply reduce the balance to current market value. Which, again, could probably work better than what they have been doing, except that it would invalidate an existing contract if forced by the government. However, designing some sort of tax or write-off benefit for the lenders in question (and the true investors and securitized owners behind the loan, that’s the harder part of the equation) would make it a bit easier of a sell.
O and minions are moving toward abolishing private property and allocating existing housing according to need. Think I am being alarmist? Look at the British Labor Party’s proposal to force the elderly into downsizing through taxes if they have more bedrooms than they need. It’s only fair don’t you know. Giving housing to people who can’t afford it won’t work.
I don’t see the problem. I bought in 2007 and am underwater. So what? I promised to pay a fixed amount over 30 years. I am 5 years in and have 25 years to go. It sucks for those that lost jobs and can’t relocate, but why should I be given a refinance? If people bought their house as an investment and not as a home, why should they be bailed out? I know a lot of young people are stuck in have empty condos in sketchy neighborhoods, $300k in debt for a unit worth $125k, and they want to get out so they can start a family, but they should have thought of the possibility they would be there for the long run when they bought it.
This proposal by our idiot sounds just like that. If he is going to give reduced mortgages to some, he must give them to ALL. . . . . . . .
—homeowners...who are current on their payments.—
This is interesting. When you sqeeze in one place, it comes out somewhere else. If people think that they will qualify if they stay current, many will do all they can to do so. This means no Christmas presents this year. This means that Christmas sales will be lower than they would have been if people sort of, you know, let the house payment go a month late or so to buy presents.
Not saying any of this is right or wrong, but the money from this is gonna come out of the economy one way or another. And our economy is already on a razor’s edge.
Excellent points. Le me expand. What is never mentioned when poeple arfe allowed to remain in their homes, paying nothing, for years, is that absolutely NO maintenance, repairs, etc, are done to these homes..thus, when the lender finally gets possession, they are often faced with tens of thousands of costs...(people remove all appliances, as an example) for repairs, water damage, etc...or have to lower their price accordingly..
Wondering why (not) nobody mentions the big test coming up on 11/9...????
If you "buy something" with NO $$$ down.then you have NO equity..you're a renter...and you'll bail again at the first problem..
Actually the people who refinance will. I predict that just like a student loan, those who take the deal will be on the hook without the protections they may have now. Of course those with firsts, seconds and HELOCS may not care. I would check the fine print though. I can just see this admin finding a way to further indebt everyone while claiming to be helping them and picking up approval ratings for doing so.
Sounds good, however, many are not paying because they can't and/or won't. Why pay when you can live rent free for up to 5 years (2 to 3 being the norm). Some are out of work - awful situation, and some just are taking advantage of the system. Hard to distinguish who is who- which it is better just pay them to go.
Another thing. In banking, the accounting rules absolutely punish a bank who cuts a deal with any borrower - residential or commercial. If you cut the rate on a paying loan or eat some principal; if it is in distress, you have to call it a “troubled debt restructure” (TDR). Many regulators (and all the investment community) think these are akin to “non accruing” or “non performing” loans (”NPAs”). Banks loathe NPA’s - so if they do the right thing and cut a deal, they get saddled with a TDR which equals a NPA (in most places).
Why bother. Get it off the balance sheet. If another bank does the same loan fresh at the lower debt level, it is a perfectly OK performing loan. The government wants the banks to work with people then punish them when they do. It is crazyland out there.
It allows homeowners who have an FHA loan and are current and have a high credit score (and presumably high income) to refinance. Even I would likely qualify if true and I’d be insane not to take advantage of it given the likely impact on the housing market in the future.
Under current tax law..forgiveness of debt is taxable as income to the beneficarey of that forgiveness. So, if Obama’s plan goes through..will all these people get 1099’s for tens of thousands of dolalrs. Hey, maybe it’s his plan to lower the deficit..
is this part of what he is building
is this part of what he is building
When the derivatives markets begin to implode, as early as next year, none of this will matter. All houses will be worthless because there will be no banks and no money.
Lots of lenders have a (little used) Cash for Keys program. Little used because you need a desirable property AND a cooperative borrower.
The Answer. Give struggling homeowners the option to refi at 2% regardless of equity.
It is and it isn’t. Most all states have adopted conformity statutes to reflect the federal law (tax debt relief act) which can be used to eliminate any money “owed”
It Should work for the majority of homeowners. May not work for those owning multi million dollar properties, but they probably don’t need it anyway. The average homeowner with a house/loan worth 500k or less likely would not pay a dime.
I expect that the new “deal” may include a provision eliminating this OR they will schedule all this so that it takes effect as the Tax Debt Relief Act expires/sunsets.
Taxpayer, hold on to your wallet. The SEIU should fund this boondoggle, since, they are the ones with jobs.
When they get around to revampimg SCAMR, let me know. ;-)
Socialist Commies Assigning Mortgages Risks
In a move akin to when Bubba put Hillary in charge of Healthcare, Moochelle could become the head HARPie...
how will the outcome now be different than the previous refinancing scheme from the gubbamint?
those resulted in most people just delaying the inevitable 6-9 months and defaulting any way.
“Majority of modified mortgages fail again, regulators say”
December 23, 2008 |
“looting the future to bribe the present” as Mark Steyn says.
So changing the accounting rules could have been a better solution in 2008 than this...