WASHINGTON (AP) -- The mortgage crisis is dragging on the economic recovery as more homeowners fall behind on their payments.
Analysts expect improvement soon, but the number of homeowners in default or at risk of foreclosure will have a lingering effect on the broader economy.
More than 10 percent of homeowners with a mortgage had missed at least one payment in the January-March period, the Mortgage Bankers Association said Wednesday. That's a record high and up from 9.1 percent a year ago.
A big jump in the number of borrowers who have missed three months of mortgage payments drove the increase.
Around 4.3 million homeowners, or about 8 percent of all Americans with a mortgage, are at risk of losing their homes, the trade group's top economist estimates. They have either missed at least three months of payments or are in foreclosure.
Should loan modification programs fail to help, their homes will go up for sale either as a foreclosure or short sale -- when the bank agrees to sell the property for less than the original mortgage amount.
Many analysts have been forecasting home prices will dip again as more of these homes go up for sale at deeply discounted prices.
"It's certainly a weight on the economy," said Mark Zandi, chief economist at Moody's Analytics, who predicts home prices will fall about 5 percent and hit the bottom next spring. "Nothing works all that well in the economy when house prices are falling."
The Obama administration's $75 billion foreclosure prevention program has barely dented the problem.
About 25 percent of the 1.2 million homeowners who started the program over the past year had received permanent loan modifications as of last month. About 23 percent of those enrolled dropped out during a trial phase that lasts at least three months. Many more are in limbo.
The administration's program hasn't been able to help Dan Felipe, 61, of Winton, Calif.
He fell into financial trouble as the economy went south. So he took out $70,000 in loans to keep his business afloat.
In danger of losing his home, he tried to get a mortgage modification from Bank of America. The bank signed him up for the government foreclosure plan last August, but hasn't lowered his mortgage payment permanently.
"I was never in this kind of mess," Felipe said. "I've taken care of my family for the last 20 years."
A Bank of America spokeswoman said Felipe's mortgage appears to not qualify for the Obama program. She said the bank will re-examine his case and consider him for other alternatives.
Economic woes, such as unemployment or reduced income, are the main catalysts for foreclosures this year. Initially, lax lending standards were the culprit. But homeowners with good credit who took out conventional, fixed-rate loans are now the fastest growing group of foreclosures.
Those borrowers made up nearly 37 percent of new foreclosures in the first quarter of the year, up from 29 percent a year earlier.
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Thursday, May 20, 2010
Tuesday, February 24, 2009
Friday, November 14, 2008
FDIC's Bair pushes aggressive mortgage plan
The FDIC chairman unveils plan that would streamline modifications to put delinquent borrowers in affordable mortgages.
NEW YORK (CNNMoney.com) -- In a surprise move, FDIC Chairwoman Sheila Bair Friday unveiled details of her plan to have the government help delinquent homeowners.
The proposal would have the government share up to 50% of the losses if the homeowner re-defaulted on the modified loan.
The plan is expected to initially help 2.2 million borrowers get new loans; after some borrowers re-default, 1.5 million would ultimately keep their homes, the FDIC estimated.
It would also pay servicers $1,000 to adjust the loan so that monthly payments were as low as 31% of a borrower's income.
The plan would cost an estimated $24.4 billion, which Bair has said could come from the $700 billion bailout Congress approved last month.
"It is imperative to provide incentives to achieve a sufficient scale in loan modifications to stem the reductions in housing prices and rising foreclosures," the Federal Deposit Insurance Corp. said in a statement Friday. "A loss share guarantee on re-defaults of modified mortgages can provide the necessary incentive to modify mortgages on a sufficient scale."
Bair's move Friday sets up a public power struggle not often seen within an administration.
The FDIC chairman has long pushed for the government to take a more active role in helping troubled homeowners. She initiated a similar plan at IndyMac, one of the largest mortgage lenders, after the agency took it over in mid-July.
Bush administration officials, however, have resisted her efforts, instead unveiling a plan Tuesday to streamline modifications of loans held or guaranteed by Fannie Mae and Freddie Mac.
Though he praised Bair's proposal, Treasury Secretary Henry Paulson Wednesday said it was one of several under discussion. Bair supporters took that to mean the plan was essentially dead.
Congressional Democrats, however, have continued to press for increased assistance to homeowners. They have publicly backed Bair, which could give her proposal the support needed for adoption.
"[The Fannie/Freddie plan] should not be considered a replacement for the guarantee program authorized by the recently-enacted financial rescue law which the FDIC has agreed to operate," Sen. Christopher Dodd, D-Conn. said Tuesday, after the mortgage finance plan was announced.
"We are still awaiting agreement from the Treasury Department to move this program forward, despite indications given to me weeks ago that an agreement was imminent. I have been in contact with both Secretary Paulson and Chairman Bair on this issue, and I intend to keep pushing for more aggressive and effective action."
Backstopping loan modifications
Borrowers who are at least 60 days late on payments would qualify for this program.
Servicers would have to systematically review all the loans in their portfolios to determine whether they would recover more value by modifying the mortgage rather than foreclosing on the home.
Loans would be adjusted by reducing the interest rate, extending the term or deferring part of the principal to the end of the mortgage.
But unlike some other government programs, the FDIC proposal would not reduce the principal to bring it in line with the home's current value. Some consumer advocates consider principal reduction key to assisting borrowers in areas where property values have plummeted, leaving many with mortgages greater than their home's worth.
Under the Hope for Homeowner program implemented last month, mortgages would be written down to 90% of the home's current market value and borrowers would be refinanced into 30-year fixed-rate mortgages insured by the Federal Housing Administration.
The FDIC's program, on the other hand, would not be as beneficial for so-called underwater homeowners. For situations where the mortgage is worth more than the home, the government's loss-sharing arrangement would gradually decline to 20% before ending for homes where the loan-to-value exceeds 150%. The loss-sharing arrangement would last for eight years.
NEW YORK (CNNMoney.com) -- In a surprise move, FDIC Chairwoman Sheila Bair Friday unveiled details of her plan to have the government help delinquent homeowners.
The proposal would have the government share up to 50% of the losses if the homeowner re-defaulted on the modified loan.
The plan is expected to initially help 2.2 million borrowers get new loans; after some borrowers re-default, 1.5 million would ultimately keep their homes, the FDIC estimated.
It would also pay servicers $1,000 to adjust the loan so that monthly payments were as low as 31% of a borrower's income.
The plan would cost an estimated $24.4 billion, which Bair has said could come from the $700 billion bailout Congress approved last month.
"It is imperative to provide incentives to achieve a sufficient scale in loan modifications to stem the reductions in housing prices and rising foreclosures," the Federal Deposit Insurance Corp. said in a statement Friday. "A loss share guarantee on re-defaults of modified mortgages can provide the necessary incentive to modify mortgages on a sufficient scale."
Bair's move Friday sets up a public power struggle not often seen within an administration.
The FDIC chairman has long pushed for the government to take a more active role in helping troubled homeowners. She initiated a similar plan at IndyMac, one of the largest mortgage lenders, after the agency took it over in mid-July.
Bush administration officials, however, have resisted her efforts, instead unveiling a plan Tuesday to streamline modifications of loans held or guaranteed by Fannie Mae and Freddie Mac.
Though he praised Bair's proposal, Treasury Secretary Henry Paulson Wednesday said it was one of several under discussion. Bair supporters took that to mean the plan was essentially dead.
Congressional Democrats, however, have continued to press for increased assistance to homeowners. They have publicly backed Bair, which could give her proposal the support needed for adoption.
"[The Fannie/Freddie plan] should not be considered a replacement for the guarantee program authorized by the recently-enacted financial rescue law which the FDIC has agreed to operate," Sen. Christopher Dodd, D-Conn. said Tuesday, after the mortgage finance plan was announced.
"We are still awaiting agreement from the Treasury Department to move this program forward, despite indications given to me weeks ago that an agreement was imminent. I have been in contact with both Secretary Paulson and Chairman Bair on this issue, and I intend to keep pushing for more aggressive and effective action."
Backstopping loan modifications
Borrowers who are at least 60 days late on payments would qualify for this program.
Servicers would have to systematically review all the loans in their portfolios to determine whether they would recover more value by modifying the mortgage rather than foreclosing on the home.
Loans would be adjusted by reducing the interest rate, extending the term or deferring part of the principal to the end of the mortgage.
But unlike some other government programs, the FDIC proposal would not reduce the principal to bring it in line with the home's current value. Some consumer advocates consider principal reduction key to assisting borrowers in areas where property values have plummeted, leaving many with mortgages greater than their home's worth.
Under the Hope for Homeowner program implemented last month, mortgages would be written down to 90% of the home's current market value and borrowers would be refinanced into 30-year fixed-rate mortgages insured by the Federal Housing Administration.
The FDIC's program, on the other hand, would not be as beneficial for so-called underwater homeowners. For situations where the mortgage is worth more than the home, the government's loss-sharing arrangement would gradually decline to 20% before ending for homes where the loan-to-value exceeds 150%. The loss-sharing arrangement would last for eight years.
Wednesday, November 12, 2008
One-Third of Americans Who Sold Their Home in the Past Year Lost Money; Trend Expected to Continue As Home Values Decline for Seventh Straight Quarter
Home values in the United States posted their seventh consecutive quarterly decline, falling 9.7 percent year-over-year to a Zillow Home Value Index(1) of $202,966, according to the third quarter Zillow Real Estate Market Reports(2), which encompass 163 metropolitan areas.
The continued declines in value are causing more homeowners to sell their homes for less than the home's original purchase price. Over the past 12 months, 30.2 percent of homes sold were sold for a loss, up from 23.7 percent at the end of the second quarter. In 17 markets - 14 of which are in California - more than half of homes sold in the past year were sold for a loss(3).
The percentage of homeowners with negative equity remained fairly steady from the second to the third quarter as more foreclosures were completed and as median down payments rose in 61 markets. One in seven (14.3 percent) of all homeowners across the country has negative equity, and of homeowners who bought in the last five years, almost one-third (29.5 percent) are underwater(3).
Meanwhile 27 of the 163 metropolitan statistical areas (MSAs) covered by Zillow's reports are experiencing longer-term impact, showing negative annualized value changes over the past five years, and 12 of the markets show flat five-year annualized returns. Most affected by long-term depreciation were hard-hit areas in California's Central Valley, like Stockton, where the five-year annualized change is -3.8 percent. Also affected are areas like Greater Boston, where the five-year annualized change is -1 percent, and the Cleveland area, where the change is -0.8 percent.
Detroit experienced the worst overall long-term depreciation, with five-year annualized change at -3.1 percent and 10-year annualized change at 0.9 percent.
Nationally, five-year annualized change for the third quarter is 3.4 percent and 10-year annualized change is 6.1 percent.
"The fact that one-quarter of markets in Zillow's third quarter reports show negative or relatively flat annualized change over five years is an indication of the enormous amount of value that has been taken out of the real estate market through home value depreciation in the past few years," said Dr. Stan Humphries, Zillow vice president of data and analytics. "It's clear we are at a unique point in history; we've had seven consecutive quarters of decline, and we expect that to continue until at least the middle of next year. Most markets are still seeing five-year annualized returns, but we will see more markets slip into flat or negative long-term change as the economy continues to suffer, factors like job losses begin to further affect foreclosure rates and home values continue to decline."
Foreclosures made up almost one in five (18.6 percent) of all transactions in the past 12 months. Not surprisingly, areas with the highest foreclosure rates are the markets with some of the greatest home value declines. In California's Central Valley, 57.6 percent of transactions in Merced were foreclosures, and in Stockton, foreclosures made up 56.4 percent of transactions. The New York metro area continued to have the lowest rate of foreclosures, with only 3.5 percent of all transactions being foreclosures(4).
It's not all bad news, however: 12 of the 163 markets in the report experienced year-over-year change in value of more than 1 percent. Most of the bright spots were in the Carolinas and upstate New York, with the Ithaca, N.Y. area experiencing a year-over-year change of 5.6 percent and the Rochester, N.Y. area seeing a 3.1 percent increase. Home values in the Jacksonville, N.C. area increased 3.9 percent and were up 3.4 percent in Winston-Salem, N.C. None of those markets experienced bubbles, but instead have seen steady year-over-year growth for the past eight years.
Some homeowners continue to be largely oblivious to the reality of the housing market, however. According to the third quarter Zillow Homeowner Confidence Survey(5), nearly half of homeowners (49 percent) believe their own home's value either increased or stayed the same over the past year. But based on the third quarter Real Estate Market Reports, almost three-quarters (74 percent) of all homes lost value in the past year.
The continued declines in value are causing more homeowners to sell their homes for less than the home's original purchase price. Over the past 12 months, 30.2 percent of homes sold were sold for a loss, up from 23.7 percent at the end of the second quarter. In 17 markets - 14 of which are in California - more than half of homes sold in the past year were sold for a loss(3).
The percentage of homeowners with negative equity remained fairly steady from the second to the third quarter as more foreclosures were completed and as median down payments rose in 61 markets. One in seven (14.3 percent) of all homeowners across the country has negative equity, and of homeowners who bought in the last five years, almost one-third (29.5 percent) are underwater(3).
Meanwhile 27 of the 163 metropolitan statistical areas (MSAs) covered by Zillow's reports are experiencing longer-term impact, showing negative annualized value changes over the past five years, and 12 of the markets show flat five-year annualized returns. Most affected by long-term depreciation were hard-hit areas in California's Central Valley, like Stockton, where the five-year annualized change is -3.8 percent. Also affected are areas like Greater Boston, where the five-year annualized change is -1 percent, and the Cleveland area, where the change is -0.8 percent.
Detroit experienced the worst overall long-term depreciation, with five-year annualized change at -3.1 percent and 10-year annualized change at 0.9 percent.
Nationally, five-year annualized change for the third quarter is 3.4 percent and 10-year annualized change is 6.1 percent.
"The fact that one-quarter of markets in Zillow's third quarter reports show negative or relatively flat annualized change over five years is an indication of the enormous amount of value that has been taken out of the real estate market through home value depreciation in the past few years," said Dr. Stan Humphries, Zillow vice president of data and analytics. "It's clear we are at a unique point in history; we've had seven consecutive quarters of decline, and we expect that to continue until at least the middle of next year. Most markets are still seeing five-year annualized returns, but we will see more markets slip into flat or negative long-term change as the economy continues to suffer, factors like job losses begin to further affect foreclosure rates and home values continue to decline."
Foreclosures made up almost one in five (18.6 percent) of all transactions in the past 12 months. Not surprisingly, areas with the highest foreclosure rates are the markets with some of the greatest home value declines. In California's Central Valley, 57.6 percent of transactions in Merced were foreclosures, and in Stockton, foreclosures made up 56.4 percent of transactions. The New York metro area continued to have the lowest rate of foreclosures, with only 3.5 percent of all transactions being foreclosures(4).
It's not all bad news, however: 12 of the 163 markets in the report experienced year-over-year change in value of more than 1 percent. Most of the bright spots were in the Carolinas and upstate New York, with the Ithaca, N.Y. area experiencing a year-over-year change of 5.6 percent and the Rochester, N.Y. area seeing a 3.1 percent increase. Home values in the Jacksonville, N.C. area increased 3.9 percent and were up 3.4 percent in Winston-Salem, N.C. None of those markets experienced bubbles, but instead have seen steady year-over-year growth for the past eight years.
Some homeowners continue to be largely oblivious to the reality of the housing market, however. According to the third quarter Zillow Homeowner Confidence Survey(5), nearly half of homeowners (49 percent) believe their own home's value either increased or stayed the same over the past year. But based on the third quarter Real Estate Market Reports, almost three-quarters (74 percent) of all homes lost value in the past year.
Thursday, July 10, 2008
Six months, 343,000 lost homes
Through the first half of 2008, the foreclosure rate shows little sign of letting up.
By Les Christie, CNNMoney.com staff writer
Last Updated: July 10, 2008: 8:27 AM EDT
NEW YORK (CNNMoney.com) -- The number of Americans losing their homes to foreclosure continued to soar in June, according to a report released Thursday.
RealtyTrac, an online marketer of foreclosed properties, reported that lenders repossessed 71,563 homes in June. A year ago, just 26,369 homes were taken back.
During the first six months of 2008, 343,159 Americans lost their homes, up 136% from 145,696 recorded during the same period in 2007.
The report revealed that foreclosure filings of all types, including notices of default, notices of auction sales and bank repossessions, rose 53% from June 2007, to 252,363. For the first six months, total filings rose 56% to 1.4 million.
"June was the second straight month with more than a quarter-million properties nationwide receiving foreclosure filings," said James Saccacio, chief executive officer of RealtyTrac.
There was a shred of good news: When compared with May, filings declined 3%.
Part of that decline may be traced to the actions of states, including Maryland and Massachusetts, that have put moratoriums on foreclosures, according to Rick Sharga, a spokesman for RealtyTrac.
"Massachusetts put a 90-day hold on new foreclosures," he said, "and filings dropped 3% there over last year."
But big increases were more common. In 13 states, filings more than doubled from a year earlier, including in Arizona, Nebraska and Oregon.
"The year-over-year increase of more than 50% indicates we have not yet reached the top of this foreclosure cycle," said Saccacio.
Adding to foreclosure woes is that home prices have been falling all year, down more than 14% in the first quarter, according to the latest figures from the S&P Case-Shiller Home Price Index.
Price declines strip homeowners of equity, making many mortgage borrowers owe more than their homes are worth. When they're underwater, they can't borrow against home equity to help out during a rough financial stretch.
Underwater properties are hard to sell because any deal would be for a sum below the mortgage balance - the bank would have to agree to take a loss. Many of these "short sales" get turned down and wind up as bank-owned properties.
"The real explosion has been in bank repossessions," said Sharga. "There's really no place else for these places to go except back to the lenders when they're underwater."
Two things work against short sales, according to Duane LeGate, president of HouseBuyerNetwork.com, a short-sale specialist. One is there is often a question of who has authority over the loan. Mortgage servicers are loath to make decisions that will result in losses of mortgage principal of loans in investor pools, even if it means smaller losses than foreclosures produce.
The second is manpower. Servicers simply don't have the personnel to handle the volume of short-sale and other loss-mitigation requests they've been receiving. Delays in processing short sales can mean approvals come too late.
"We hear about all these streamlined mortgage lending programs," said LeGate. "Where are the streamlined processes to undo the mortgages they originated?"
Sun Belt still hard hit
Nevada led all states in the rate of foreclosure activity for the 17th consecutive month, with one filing for every 122 households, a total of 8,713. California had the most filings with 68,666, one for every 192 households.
Other states with very high foreclosure rates included Arizona, one for every 201 households, Florida (one for every 211), Michigan (one in 375) and Ohio (one in 382).
California had seven of the 10 metropolitan areas worst hit by foreclosure. Stockton had one for every 72 households - more than six times the national average of one for every 501 households. Merced, was second with one for every 77 households, and Modesto - one in 86 - was third.
Cape Coral-Fort Myers, Fla., where one in every 91 households received a foreclosure filing, had the fourth highest rate. In Las Vegas, the only city outside of California and Florida with a foreclosure rate ranking among the top 10, one in 99 households received a foreclosure filing in June.
First Published
By Les Christie, CNNMoney.com staff writer
Last Updated: July 10, 2008: 8:27 AM EDT
NEW YORK (CNNMoney.com) -- The number of Americans losing their homes to foreclosure continued to soar in June, according to a report released Thursday.
RealtyTrac, an online marketer of foreclosed properties, reported that lenders repossessed 71,563 homes in June. A year ago, just 26,369 homes were taken back.
During the first six months of 2008, 343,159 Americans lost their homes, up 136% from 145,696 recorded during the same period in 2007.
The report revealed that foreclosure filings of all types, including notices of default, notices of auction sales and bank repossessions, rose 53% from June 2007, to 252,363. For the first six months, total filings rose 56% to 1.4 million.
"June was the second straight month with more than a quarter-million properties nationwide receiving foreclosure filings," said James Saccacio, chief executive officer of RealtyTrac.
There was a shred of good news: When compared with May, filings declined 3%.
Part of that decline may be traced to the actions of states, including Maryland and Massachusetts, that have put moratoriums on foreclosures, according to Rick Sharga, a spokesman for RealtyTrac.
"Massachusetts put a 90-day hold on new foreclosures," he said, "and filings dropped 3% there over last year."
But big increases were more common. In 13 states, filings more than doubled from a year earlier, including in Arizona, Nebraska and Oregon.
"The year-over-year increase of more than 50% indicates we have not yet reached the top of this foreclosure cycle," said Saccacio.
Adding to foreclosure woes is that home prices have been falling all year, down more than 14% in the first quarter, according to the latest figures from the S&P Case-Shiller Home Price Index.
Price declines strip homeowners of equity, making many mortgage borrowers owe more than their homes are worth. When they're underwater, they can't borrow against home equity to help out during a rough financial stretch.
Underwater properties are hard to sell because any deal would be for a sum below the mortgage balance - the bank would have to agree to take a loss. Many of these "short sales" get turned down and wind up as bank-owned properties.
"The real explosion has been in bank repossessions," said Sharga. "There's really no place else for these places to go except back to the lenders when they're underwater."
Two things work against short sales, according to Duane LeGate, president of HouseBuyerNetwork.com, a short-sale specialist. One is there is often a question of who has authority over the loan. Mortgage servicers are loath to make decisions that will result in losses of mortgage principal of loans in investor pools, even if it means smaller losses than foreclosures produce.
The second is manpower. Servicers simply don't have the personnel to handle the volume of short-sale and other loss-mitigation requests they've been receiving. Delays in processing short sales can mean approvals come too late.
"We hear about all these streamlined mortgage lending programs," said LeGate. "Where are the streamlined processes to undo the mortgages they originated?"
Sun Belt still hard hit
Nevada led all states in the rate of foreclosure activity for the 17th consecutive month, with one filing for every 122 households, a total of 8,713. California had the most filings with 68,666, one for every 192 households.
Other states with very high foreclosure rates included Arizona, one for every 201 households, Florida (one for every 211), Michigan (one in 375) and Ohio (one in 382).
California had seven of the 10 metropolitan areas worst hit by foreclosure. Stockton had one for every 72 households - more than six times the national average of one for every 501 households. Merced, was second with one for every 77 households, and Modesto - one in 86 - was third.
Cape Coral-Fort Myers, Fla., where one in every 91 households received a foreclosure filing, had the fourth highest rate. In Las Vegas, the only city outside of California and Florida with a foreclosure rate ranking among the top 10, one in 99 households received a foreclosure filing in June.
First Published
Monday, July 07, 2008
California Foreclosure Reform Bill Clears State Assembly
SB1137, which is designed to reform the foreclosure process in California for the benefit of homeowners trying to retain their homes, has passed the Assembly with bi-partisan support and the two-thirds majority required for passage.
The bill, sponsored by Sens. Don Perata, D-Oakland; Ellen Corbett, D-San Leandro; and Michael Machado, D-Linden, requires lenders and servicers to contact borrowers (or engage in a prescribed process to do so) to schedule telephone or in-person meetings on restructuring options before beginning the foreclosure process; requires a 60-day notice to be given to tenants of buildings facing foreclosure before they can be removed from a rental housing unit; and allows fines of up to $1,000 a day for owners of foreclosed properties that fail to adequately maintain them.
The legislation will take effect immediately if signed by Gov. Arnold Schwarzenegger, R-Calif., though the provision requiring servicers to contact borrowers before starting the foreclosure process will have a 60-day implementation period before it goes into effect, notes the Center For Responsible Lending, which supports the bill.
"SB1137 will help stem the foreclosure tide in California," says Kevin Stein, associate director of California Reinvestment Coalition. "At the same time, Attorney General Brown's lawsuit against Countrywide underscores the need for the legislature to also put in place strong consumer protections to ban the kinds of abusive practices engaged in by Countrywide and other lenders, which have harmed so many families and fueled the current crisis."
The bill, sponsored by Sens. Don Perata, D-Oakland; Ellen Corbett, D-San Leandro; and Michael Machado, D-Linden, requires lenders and servicers to contact borrowers (or engage in a prescribed process to do so) to schedule telephone or in-person meetings on restructuring options before beginning the foreclosure process; requires a 60-day notice to be given to tenants of buildings facing foreclosure before they can be removed from a rental housing unit; and allows fines of up to $1,000 a day for owners of foreclosed properties that fail to adequately maintain them.
The legislation will take effect immediately if signed by Gov. Arnold Schwarzenegger, R-Calif., though the provision requiring servicers to contact borrowers before starting the foreclosure process will have a 60-day implementation period before it goes into effect, notes the Center For Responsible Lending, which supports the bill.
"SB1137 will help stem the foreclosure tide in California," says Kevin Stein, associate director of California Reinvestment Coalition. "At the same time, Attorney General Brown's lawsuit against Countrywide underscores the need for the legislature to also put in place strong consumer protections to ban the kinds of abusive practices engaged in by Countrywide and other lenders, which have harmed so many families and fueled the current crisis."
Wednesday, June 25, 2008
Down payment assistance to risky borrowers $300B Housing Rescue Plan Passes
Commentary By Anthony Landaeta Jr
Posted 06/24/07 http://anthonylandaeta.blogspot.com/
Why would the Government offer loans and down payment assistance to risky borrowers after the collapse of the banking industry, isn't that what got us into too this mess in the first place with 100% financing and adjustable rates. The Government not only what's us to bail out the Bank's that created this mess but they also want to provide $14.5 Billion in a array of Tax Breaks, including a credit of up to $8,000 for first-time homebuyers who buy in the next year. $8,000 Dollars is a lot of money, so if a borrower wants to purchase a home at $265,000 through the Federal Housing Administration (FHA/HUD) there are purchasing that home with no money down which would be 100% financing, FHA requires as much as 3% in down payment so we as tax payers get to help those folks purchase there Dream Home's without any savings. "This is the government at there best" leading the charge Christopher J. Dodd, D-Conn, Rep Pelosi, Nancy D-CA with a set of weak Republicans that have no backbone with low approval ratings.
At the Capitol statement by Sen. Christopher J. Dodd, D-Conn., the Banking Committee chairman, said the lending measure "would allow us to begin to put a tourniquet on the hemorrhaging of foreclosures in this country."
Dictionary meaning:
Tourniquet: Bandied Quick fix
Hemorrhaging: To lose (assets): a company that was hemorrhaging money.
Members of the Congressional Black Caucus call it unacceptable, arguing it doesn't do enough to address the needs of black Americans. (My be we should just give everyone homes for free)
"Owning a home is not a right, it has to be earned"
There estimated 400,000 distressed borrowers who otherwise would be considered too financially risky to qualify for government-insured, fixed-rate loans. The Government will aid these borrowers by allowing them to refinance there home into a FHA loan where the Government will share in the portion of any profits they make from selling or refinancing their properties in the future. " Your Tax dollars work "
This is why we need checks and balances on our government having a equal Balance of independent - Democrat - Republican senators will help to ensure bills like this won't go anywhere lets hope President Bush Veto's this bill we all know a President Obama would sign this Bill, and we all know this election belongs to Obama he will be the next President, with that said a Democratic House and Senate with a Democratic President only means a large creation of Government Programs with High Taxes for the next 4 to 8 years, so hold on to your wallets because there is a lot of needy people with there hands out that the democrats have to Feed.
Anthony Landaeta Jr
Posted 06/24/07 http://anthonylandaeta.blogspot.com/
Why would the Government offer loans and down payment assistance to risky borrowers after the collapse of the banking industry, isn't that what got us into too this mess in the first place with 100% financing and adjustable rates. The Government not only what's us to bail out the Bank's that created this mess but they also want to provide $14.5 Billion in a array of Tax Breaks, including a credit of up to $8,000 for first-time homebuyers who buy in the next year. $8,000 Dollars is a lot of money, so if a borrower wants to purchase a home at $265,000 through the Federal Housing Administration (FHA/HUD) there are purchasing that home with no money down which would be 100% financing, FHA requires as much as 3% in down payment so we as tax payers get to help those folks purchase there Dream Home's without any savings. "This is the government at there best" leading the charge Christopher J. Dodd, D-Conn, Rep Pelosi, Nancy D-CA with a set of weak Republicans that have no backbone with low approval ratings.
At the Capitol statement by Sen. Christopher J. Dodd, D-Conn., the Banking Committee chairman, said the lending measure "would allow us to begin to put a tourniquet on the hemorrhaging of foreclosures in this country."
Dictionary meaning:
Tourniquet: Bandied Quick fix
Hemorrhaging: To lose (assets): a company that was hemorrhaging money.
Members of the Congressional Black Caucus call it unacceptable, arguing it doesn't do enough to address the needs of black Americans. (My be we should just give everyone homes for free)
"Owning a home is not a right, it has to be earned"
There estimated 400,000 distressed borrowers who otherwise would be considered too financially risky to qualify for government-insured, fixed-rate loans. The Government will aid these borrowers by allowing them to refinance there home into a FHA loan where the Government will share in the portion of any profits they make from selling or refinancing their properties in the future. " Your Tax dollars work "
This is why we need checks and balances on our government having a equal Balance of independent - Democrat - Republican senators will help to ensure bills like this won't go anywhere lets hope President Bush Veto's this bill we all know a President Obama would sign this Bill, and we all know this election belongs to Obama he will be the next President, with that said a Democratic House and Senate with a Democratic President only means a large creation of Government Programs with High Taxes for the next 4 to 8 years, so hold on to your wallets because there is a lot of needy people with there hands out that the democrats have to Feed.
Anthony Landaeta Jr
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