Bush Plans Loan Relief on Housing

[RamboLiberal]

Source: NY Times

President Bush, in his first response to families hit by the subprime mortgage crisis, plans to announce several steps Friday to help Americans who have credit problems meet the rising cost of their housing loans, administration officials said Thursday.

The officials said Mr. Bush would call for the Federal Housing Administration to change its federal mortgage insurance program in a way that would let an additional 80,000 homeowners with spotty credit records sign up, beyond the 160,000 likely to use it this year and next.

The administration is offering his plan, which will include what one official called jawboning of lenders to persuade them not to foreclose on some borrowers, at a time of growing attacks on Mr. Bush from Democrats who say he has remained on the sidelines amid increasing anxiety over whether millions of Americans could end up losing their homes. Other elements of the plan would need legislative action, requiring Mr. Bush to win over the Democratic leadership in Congress.

Administration officials, who asked not to be identified, briefed a handful of news organizations on the proposals to be announced by Mr. Bush at an appearance in the White House Rose Garden on Friday morning.



Read more: http://www.nytimes.com/2007/08/31/business/31home.html?hp

[napi21]

1. Hmmm...I wonder what THIS will really look like? It will either be

a sort of decent offer to throw us dogs a bone (which his base will HATE) or it will be another smoke screen designed to look good but mean NOTHING! I'll do my best to try to watch him, but I'm not sure I can do it! Might have to just listen to the reporters recap later. It's much easier on my nerves that way!

[Fearless]

3. Exactly, he's just trying to build capital pre-Iranian invasion.

Doubly so he's doing exactly what his corporate bosses want him to do. Protect their interests. And, he's, as usual, doing exactly the worst thing for this country. Today we're relying too much on credit. Mortgage companies got greedy and gave out too many high risk loans and overextended their assets. They sold the debt off to foreign companies, which will be crippled with the impending burst of the housing bubble. We cannot lower key interest rates (in fact they should be raised progressively) because it will only cause more loans to be taken out. Thus restricting our economy to a low interest rate for the predictable future. What needs to be done is to progressively purge these high risk loans. It seems cruel to those who took them out, but for the sake of the economy and their own fiduciary future they have to be taught to live within their means. At this rate and with BushCo's plan, this country is headed for a new depression.

[rmgarrette64]

38. You have to guess?

I'll spare you the suspense.

Door #2. Smoke screen designed to look good but mean nothing.

R. Garrett

[WCGreen]

2. It's going to be, at least I think so, aimed at the stupid fucks

who put no money down and bought a McMansion in the Reddest of red suburbs using adjustable rate mortgages...

We mustent let Biff and Buffy loose their homes...

[Fearless]

4. EXACTLY! Preying on the uninformed.

[napi21]

6. HAY!!!! Quit disparaging Buffy! She's my darling little dog, and she's

a hell of a lot smarter than Shrub! She's also at NOT rISK of losing her home!!!!!

[NeoConsSuck]

14. The stupid fucks

were not the ones who put no money down. They were the smart fucks. They can walk away at anytime, without losing anything, since they didn't put anything in.

If you put no money down on a house, and your mortgage is higher than what the house is now worth, why would you not walk away and let the lender hold the bag?

[WCGreen]

34. Because if your home is forclosed the bank reports the write off to

the IRS...

Then you, if you are not in bankuptcy court, will have to pay taxes on the amount of money left on our mortgage to the bank...

[Mojorabbit]

5. I am sure the party

is on his butt about this. Having so many people losing their homes right before the election is not good. It also makes me thing on the other hand that the problem might be much worse than we are hearing so far and it is bad enough now.

[BadGimp]

7. the "administration's plan.. will include .. jawboning of lenders"

Wow they don't even remove the low brow bullshit vernacular any more.

[Arkansas Granny]

15. If they removed the low brow bullshit vernacular from Bush's

remarks, there wouldn't be much left to report.

Speaking of "jawboning", do you remember this remark from the 2000 Presidential debates?

“I think the president ought to get on the phone with the OPEC cartel and say: ‘We expect you to open your spigots’ …The president of the United States must jawbone OPEC members to lower the price. And if, in fact, there is collusion amongst big oil, he ought to intercede there as well.”
Financial Times, February 2, 2000


http://www.house.gov/georgemiller/press/rel33004.html

We all see how well his jawboning works.

[kysrsoze]

28. This is exactly why, although I agree with his approach for the second time ever, I have no faith

that it will actually get done. Of course if he doesn't follow through on this one, everybody's hosed (except the haves and the have mores).

[jayfish]

24. I Wonder If That'll Work Out As Swimmingly As Jawboning...

the Saudis to "Open up the spigots" did? :eyes:

Jay

[kurth]

8. No bailout for flippers

[onewholaughsatfools]

9. lol the flippers are the one's

getting the bail out.......

[northzax]

10. the Federal Mortgage Insurance Program

is only available to primary residences.

[MarkInLA]

11. I SAY NO!!!

This is outrageous, in my opinion. This will only slow down the corrections currently taking place in the market. Any so-called "relief package" will only result in helping to keep housing prices artificially high.

Some of us (like me) have been diligently saving money, waiting for the market to correct before buying a first home. Now that it's finally happening, Bushie wants to stop it?! What kind of "limited government" is that? So much for free markets and capitalism, I guess...

[mahatmakanejeeves]

23. "Some of us (like me) have been diligently saving money...."

Don't worry. Once the owners start to see their housing prices go back up again, surely they will share their capital gains with the non-owners who had to bail them out back in 2007 and 2008.

[kysrsoze]

29. Some of us "little people" also run into financial troubles like medical bills, lost jobs, etc.

If you just leave this mess alone, it has the potential to make Poppy Bush's recession of the early 90's look like a hiccup. This is serious stuff. If it all comes crashing down, who do you think is going to come in and swoop up all the cheap real estate, besides yourself, of course?

They're not talking about bailing out anything - just moving people into more affordable loans. There are two issues though: First, I don't believe anything Bush says when he talks about the good of the American people. Second, what happens if these people can't afford their payments and STILL default? The government has no money left. Things need to be tightened.

[notadmblnd]

12. How about restricting offshoring and creating some jobs?

Outside of my home, I have less than 1000.00 of debt. Without a job I risk losing my home in the next 18 months. I don;t need a delay, I need a job.

[annabanana]

13. If he's willing to extend this to 240,000 people, that means there

must be several million in the same boat... (repug charity math)

[Doctor_J]

16. Exactly what Krugman proposed a couple weeks ago

I can't believe * is signing on to Big Government Nanny State Socialistic Communist Big Government Socialism.

[dipsydoodle]

17. BBC News , today :

US President George W Bush is expected to set out plans to help millions of homeowners with sub-prime mortgages avoid defaulting.
>
Reports suggest President Bush will call for Congress to support his plans to allow the government-backed mortgage insurer - the Federal Housing Administration - to guarantee loans for borrowers who are more than 90 days behind with their payments.
>
President Bush is also expected to discuss ways to prevent such a crisis in the mortgage market happening again.

This is likely to include highlighting the need for strong enforcement of laws that prevent irresponsible lending.

http://news.bbc.co.uk/1/hi/business/6971746.stm

I note the additional line : Democrats claim the Bush administration should have done this when it first came to power. Perhaps someone could draw to my attention where they've pursued this issue since they took control of Congress. :shrug:

[Ian David]

18. A Gift to the Mortgage Insurance industry that will probably not cover homes under a million dollars

[Maribelle]

19. Loans that shouldn't have been made by the corrupt lenders to begin with?

If people have fallen behind on three sub-prime mortgage payments, how will Bush's steps help them - - it will merely extend the debt that has overburdened them to begin with.

Tax payers should be outraged over this ploy Bush will use to merely help out his incompetent cronies.

[spotbird]

20. Some people should not own homes.

At this rate, most people shouldn't own homes, but that's another story.

The big lie about home ownership is that taxes, insurance and mortgage payments are the costs of ownership, but in fact those don't cover much to the real cost, especially for an older, less expensive home. First of all, like a car, a house loses 7%+ of it's value at closing. It would take at least that amount of appreciation to break even at a resale. Then there is maintenance which can bankrupt a family without any cash reserves. A roof leak, termites, a broken door can all be very costly, add that to the costs of paint, mowing and generalized upkeep, it's expensive to "own" a home.

If a household can't afford a down payment, they shouldn't buy a home. It's a trick that will put them in a worse position before they became "homeowners."

[InkAddict]

21. Can you say *s a walking FUBAR

Obviously, it's getting close to election year and it suddenly dawned on his partners in crime that you can't convince the "homeless" to contribute $$ they don't have to keep that old war chest in good shape.

Where were any plans to keep American jobs here at home so we wouldn't lose our homes in the first place; where were any plans to get our elderly and sick the type of care they needed at affordable costs for themselves and their families so we wouldn't lose our homes and our health. Where were plans to help those effected started with a truly clean slate, at any age? Where was the assistance in keeping a lid on tuition escalation?

He must be thinking that there's more than one way to skin a cat (torture the Middle Class peasants). In the long run, I guess I'd be very skeptical of any of his "rescue" plans.

I wasn't a flipper; I didn't go with a "creative" loan; but my home of 18 years is nevertheless gone due to this pukin' idiot's party's policies. God, I H8TE this fool.

[InkAddict]

22. Can you say *s a walking FUBAR

Obviously, it's getting close to election year and it suddenly dawned on his partners in crime that you can't convince the "homeless" to contribute $$ they don't have to keep that old war chest in good shape.

Where were any plans to keep American jobs here at home so we wouldn't lose our homes in the first place; where were any plans to get our elderly and sick the type of care they needed at affordable costs for themselves and their families so we wouldn't lose our homes and our health. Where were plans to help those effected started with a truly clean slate, at any age? Where was the assistance in keeping a lid on tuition escalation?

He must be thinking that there's more than one way to skin a cat (torture the Middle Class peasants). In the long run, I guess I'd be very skeptical of any of his "rescue" plans.

I wasn't a flipper; I didn't go with a "creative" loan; but my home of 18 years is nevertheless gone due to this pukin' idiot's party's policies. God, I H8TE this fool.

[Yavin4]

25. YOU CANNOT PAY FOR HOMES WITHOUT MIDDLE CLASS PAYING JOBS!!!!!!!

Q: How did our parents' generation buy homes?
A: With a 10% or more cash down payment and a fixed 30-year mortgage.

Q: Where did our parents' generation get the money for the down payment?
A: Through their wages which they got by forming unions and getting paid a true middle class wage. Also, they voted for polticians that would pass laws to protect their rights as workers.

Q: With middle class paying jobs in mfg and IT being sent overseas, how can the current generation buy homes?
A: Through relaxed loan procedures like sub prime mortgages and ALT-A mortgages.

Q: If people don't have middle class paying jobs and the interest rates on these relaxed loans tick up, how will these people pay off their mortgages?
A: They cannot. They go under and take the entire economy with them.

The whole sub prime mortgage mess was done for the purpose of fooling working class america into believing that they are middle class. By puttin them into homes and giving them mortgages, they won't form labor unions to fight for better wages and benefits at WalMart. They won't vote for politicians that would strengthen their rights as workers. They won't protest globalization and outsourcing.

In sum, debt is being used to quell the political will of the masses. These policies are straight out of the imperialist playbook. Go read, "Confessions of an Economic Hit Man".

[DuaneBidoux]

32. Exactly! See my post below (Sounds like it'll make it worse...)

[conspirator]

37. This is like giving drug addicts a free dose of crack to keep them coming back

No one should go into mortgage for a home in the first place. It's like burying your money.
You end up paying 2 houses and you won´t have any return for your investment, only if you are lucky.

[tanyev]

26. Freepers not happy. (Last one is the best)

Are we taxpayers and those who otherwise know/knew how to balance a checkbook, in for another dose of "compassionate conservatism"?
I wonder.


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Big Government George strikes again.

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The solution can begin and end with telling these folks to sell their jet skis, Escalades, motorhomes, and vacation homes, cook their own meals at home, and don’t be so stupid to think they can buy homes with a payment that is 50% of their gross income...and pay less than the interest that is due every month. There’s no need for George Bush to be sticking his fingers in my wallet to bail out someone with no financial sense.

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The theme of Bush’s speech will be “Prudence is for suckers. Smart guys borrowed more than they could possibly handle- and you lucky tax payers are going to reward this behavior.”

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President Bush’s approval rating stands at about 29%, Congress is about half that.

Obviously the Rats would love to hand out lots of our hard-earned money to the oh-pressed minorities, but maybe they will refuse to go along with this plan out of spite.

Best thing we could hope for is another 1.5 years of gridlock until FDT moves in.


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Somehow I am getting even more trepidation over this whole thing as it relates to taxes on the normal people.
If so, man! have we ever had a fox in the henhouse for the last 6 long years.

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The crux here isn’t that it’s gonna bail out the borrowers, it’s that this will essentially be bailing out the hedge funds and other institutions who can’t value any of their asset backed tranches because it’s so contaminated with all this subprime crap.

It’s actually brilliant if you think about it, we get soaked for a crapload of new government debt (which will essentially be an inflation producing cash infusion via the borrowers) while huge institutions making enormous derivatives plays and 30X leveraged deals get a freakin’ moral hazard subsidy of the gods.

Gee, I wonder if there’ll be any campaign contributions for this? I’m betting none of the sacks of crap we call elected officials will get un-elected for it...

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GWB is the dumbest sumbish I have ever seen in public office and I am afraid to say I am ashammmmmmmmmed he claims to be a Texan.
I would never vote for another Bush as long as I live, even if it was for dogcatcher.
Nobody bailed me out when I got sick 10 yrs ago and nearly got foreclosed on. It was a long, expensive drawn out struggle that became final when I paid the damn house off earlier this year.
Over the last 30 years, either from savings and loan buyouts, local bank failures, distant bank failures, the savings and loan bust or whatnot, our loan was with 6 mortgage companies, the last two of which were sub-primers. It is safe to say that I will never finance a house again with anybody for any reason. I will live in a tent rather than deal with them anymore.
Now for the good part, the house is mine, all mine and nobody elses, except for paying rent in the form of property taxes!!!!!

http://www.freerepublic.com/focus/f-news/1889254/posts

[JNelson6563]

30. And yet I highly doubt

they did any whining about the well-over $100 billion the Gov. chruned out to stop the markets from bleeding to death.

Julie

[mountainvue]

27. What he's doing is nothing that isn't already

available. It's an empty gesture, as usual.

[mountainvue]

39. Here is the outline of the plan I received in an email.

If this is how it actually is, then it will help people. The other side of the coin is if these homeowners default on the new FHA mortgages then guess who gets left holding the bag?

BUSH ADMINISTRATION TO HELP NEARLY ONE-QUARTER OF A MILLION HOMEOWNERS REFINANCE, KEEP THEIR HOMES
FHA to implement new “FHASecure” refinancing product
President George W. Bush today (08/31/07) announced that HUD's Federal Housing Administration (FHA) will help an estimated 240,000 families avoid foreclosure by enhancing its refinancing program effective immediately. Under the new FHASecure plan, FHA will allow families with strong credit histories who had been making timely mortgage payments before their loans reset-but are now in default-to qualify for refinancing…

To read the entire press release, please visit: http://www.hud.gov/news/release.cfm?content=pr07-123.cfm

LENDERS PLEASE NOTE: FHA WILL PUBLISH A NEW MORTGAGEE LETTER WITH GUIDANCE ON THE NEW FHASecure PROGRAM ON OR ABOUT TUESDAY SEPTEMBER 4th, 2007 at: http://www.hud.gov/offices/hsg/mltrmenu.cfm

AND

FHASecure Initiative information for HUD Housing Counseling Agencies:

The Federal Housing Administration (FHA) is pleased to announce a new initiative that will enable homeowners to refinance various types of adjustable rate mortgages (ARMs) that have recently “reset.”

Under FHASecure, borrowers that are delinquent on their mortgages as a result of interest rate resets will now be able to refinance using an FHA-insured mortgage. In many cases homeowners may be permitted to include mortgage payment arrearages into the new loan amount, subject to existing geographical mortgage limits and the loan-to-value limit shown below. Before today, only borrowers who were current on their existing loan were allowed to re-finance into an FHA-insured mortgage.

Highlights of the FHASecure Initiative:

1. The mortgage being refinanced must be a non-FHA ARM that has reset.

2. The mortgagor’s payment history on the non-FHA ARM must show that, prior to the reset of the mortgage, the mortgagor was current in making the monthly mortgage payments.

3. If there is sufficient equity in the home, under additional eligibility instructions provided below, FHA will insure mortgages that include missed mortgage payments.

4. Under certain conditions explained below, FHA will insure first mortgages where (1) the existing note holder writes off the amount of indebtedness that cannot be refinanced into the FHA insured mortgage; or (2), the FHA-approved lender making the new mortgage or the existing note holder may take back a second lien that includes closing costs, arrearages or previous secondary financing.

5. Lenders must determine, as part of the underwriting process, that the reset of the non-FHA ARM monthly payments caused the mortgagor’s inability to make the monthly payments and that the mortgagor has sufficient income and resources to make the monthly payments under the new FHA-insured refinancing mortgage.

Additional Information about the FHASecure Initiative:

What May be Included in the FHASecure Mortgage Amount: FHA will permit the inclusion of the existing first lien, any purchase money second mortgage, closing costs, prepaid expenses, discount points, prepayment penalties, and late charges. FHA will also permit arrearages (principal, interest, taxes and insurance) to be added into the new loan amount.

Subordinate Financing under the FHASecure Initiative: If the new maximum FHA loan is not enough to pay off the existing first lien, closing costs and arrearages, the lender may execute a second lien at closing to pay the difference. The combined amount of the FHASecure first mortgage and any subordinate lien may exceed the applicable FHA loan-to-value ratio and geographical maximum mortgage amount. If payments on the second are required, they must be included in qualifying the borrower. If payments are deferred, they must be so for no less than 36 months to not be considered in the qualifying ratios.

Educate Borrowers Regarding FHASecure: The FHASecure initiative will take effect almost immediately through administrative action. Counselors should understand this new opportunity and knowledgeably present it as a viable alternative for delinquent borrowers struggling to pay higher interest rates. HUD will soon publish a Mortgagee Letter providing additional and more detailed information regarding the new initiative.

[DuaneBidoux]

31. Sounds like it'll make it worse. Decrease amount needed for downpayment? Encourage more loans to..

poor?

Increasing the number of loans people can get with spotty credit is not an answer--this is what got us into this problem in the first place.

Decreasing the needed down payment is also a bad idea (they've also been doing that already and it was also a bad idea). The less of one's own money one has invested (conservatives do understand some true principles) the less one will do to try to save your own house.

What we need to do is work as a nation to make sure that enough real income is getting to working people who work hard to be able to afford a decent down payment. None of these people was ever asking for a handout--they have only wanted a share in the American pie. Helping them to get loans with less qualification in not the answer. Helping the working people with better wages and job conditions so that they qualify like everyone else IS the answer.

[Yavin4]

33. If You Want To Stabilize Home Prices, Then You Have To Increase Wages

One simple way to increase wages would be a national health care plan. By instituting such a plan, you would free up billions of dollars that consumer pay in health care costs annually.

[TexasBushwhacker]

35. Well, if we have to bail out someone ....

I'd rather they offer help to the homeowners than bailing out the banks and S&L's.

[roamer65]

36. Here comes Junior's version of the RTC.