Posted on 03/26/2010 7:27:10 AM PDT by outpostinmass2
WASHINGTON—After months of criticism that it hasn't done enough to prevent foreclosures, the Obama administration is announcing a plan to reduce the amount some troubled borrowers owe on their home loans.
Discuss COMMENTS (86) The multifaceted effort will let people who owe more on their mortgages than their properties are worth get new loans backed by the Federal Housing Administration, a government agency that insures home loans against default.
That would be funded by $14 billion from the administration's existing $75 billion foreclosure-prevention program. But it could spark criticism that the government is shouldering too much risk by taking on bad loans made during the housing boom. In addition, their existing mortgage companies will be able to receive incentives to lower their principal balances.
The program also includes assistance to help unemployed homeowners keep paying their mortgages.
The plan is the latest effort by the Obama administration to tackle the foreclosure crisis which has continued to grow under its watch. Home foreclosures have soared despite the administration's effort to prevent foreclosures, a complex and problem-plagued endeavor involving more than 100 mortgage companies. Only 170,000 homeowners have completed that process out of 1.1 million who began it over the past year.
(Excerpt) Read more at boston.com ...
Sounds to me like another bank bail out but being billed as help for the home owners.
Contracts? We don’t need no stinking contracts!
Who the %&*!!#$ does the “President” think he is telling banks what they can charge customers for loans???
I told my family about this last night, and my 15 year old daughter said, “But..... that’s unconstitutional.”
She has more knowledge than most of the people in Washington, including Obama.
How soon before everyone stops paying so we all get cheaper payments. If you are unemployed it’s one thing. But if you were stupid enough to buy a house on a 3-1 or 5-1 ARM or any other variable rate loan you should lose your house. Sorry. lets stop rewarding the stupid!!!
Yep, to be fair, they would have to eventually restructure everyone’s mortgage.
Well, maybe the federal gov’t will take over the entire mortgage market eventually. Just as they are now federalizing all student loans, maybe all mortgages are next.
Obammy is desperate for votes. He is trying to shore up his campaign for 2012. Pure political manouvering, why should he care about what is constitutional?
“Well, maybe the federal gov’t will take over the entire mortgage market eventually. Just as they are now federalizing all student loans, maybe all mortgages are next.”
Wouldn’t it just be easier to had over 100% of our earnings and just let brother O handle everything?
actually this is the existing program with a new press release.
seriously.
the 31% program has been in place for a few months.
it is all smoke and mirrors.
few if any qualify so there is the ILLUSION of help without any help.
it is all big brother propaganda.
(your 20 gram ration is now increased to 20 grams)
Most of these people are better off filing a ch 13 or 7 where the credit cards and second mortgage are eliminated and they can reboot their lives.
Soon my friend. Nancy and Harry are on it.
75% of the 5 - 7 million mortgages that are 6 months delinquent right now were originally packaged as “prime”.
By the early 2000’s, the average “prime” loan did not fit the traditional definition of a prime mortgage. (20% down payment, fully documented income, fixed rate, low debt-ratio).
A 2008 study of 4 million foreclosures found that “low or no down payment” is the #1 common denominator in foreclosed mortgages... 51% of the 4 million foreclosures in that study were originally packaged as “prime” loans.
By 2000, a down payment was not called an “investment”, it was “an obstacle to home ownership”.
When a person can grasp the fact that the vast majority of mortgages that were done when the market was completly over-heated were actually non-prime loans (even though they may have been called prime), then they will understand the scope of this problem and that this new program and all of the others programs cannot fix it.
The only answer is to let them go into foreclosure (or short sale) and let someone who can afford the payment buy them at the true market value.
The chances of the gummint doing that? Zero.
Prolonging the pain and creating yet another moral hazard is all they are doing.
“Soon my friend. Nancy and Harry are on it.”
Wish they’d hurry so I can sit back and relax.........LOL
They are desperately trying to get people who are underwater on their loans to re-set their loans and lock in lower fixed long-term rates -- even if it means reducing the base amount of the mortgage.
The rationale for this (and I have no opinion right now as to whether this is a good idea or a bad one) is simple . . . with interest rates set to rise dramatically in the future in order to inflate away much of this country's massive debt, the U.S. government is trying to ward off a scenario in which millions of people walk away from their homes and the entire real estate market collapses.
Another factor here is that all of this discussion involves people with first mortgages who are in financial trouble. There may be a dangerous issue lurking here that hasn't gotten a lot of attention because banks haven't necessarily been making a lot of noise about it . . . and that is the potentially huge number of second mortgages and HELOCs that are subordinated to first mortgages that are already in trouble.
Brought to you buy the incompetent dolts that now run your health care.
Every time government interferes with the market the affect is worse not better. History shows this over and over again.
It sounds like now is the time to go buy a new house then refuse to make the payments until you get part of the principle written down and better refinancing terms.
From a quick check, I believe people who are at risk of defaulting on an underwater loan are eligible for forgiveness of principal.
However, those who are soldiering on, successfully making payments are not eligible.
This punishes success.
Don’t forget there is colusion here.
The banks hyperinflated the value of houses.
The banks have armies of lobyists working on this.
Don’t forget THIS PROGRAM IS IN PLACE NOW.
this is a PR stunt for the slaves.
The banks only do what they want to do.
Obama: Define success.
bump
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