White House Expands Program To Help Homeowners Head Off Foreclosure

[Purveyor]

Source: Associated Press

WASHINGTON (AP) — The Bush administration is expanding a government program to help homeowners head off foreclosure as it scrambles to counter Democratic calls for a broader federal housing rescue.

The plan would enable more low- to moderate-income homeowners to refinance into mortgages with monthly payments they can afford, while lenders would take a loss on the loans.

It is a more modest version of a concept Democrats have recently been pushing to respond to the mortgage mess, which would have the Federal Housing Administration back restructured loans for distressed borrowers. The administration’s idea, however, would reach far fewer borrowers than the Democrats’ proposal and would be financed by homeowners’ mortgage insurance premiums rather than taxpayer dollars.

Rep. Barney Frank, D-Mass., the Financial Services Committee chairman, opened a hearing on his broader plan Wednesday noting sarcastically that the timing of the Bush administration’s proposal was a “remarkable coincidence.” Still, he said the plan’s release was a recognition that some government action was needed, and that it should start with lenders taking losses on distressed loans.

“Anyone who thinks we should do nothing,” Frank said, “will have to deal with me and the Bush administration.”

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Under the expansion, FHA would insure new mortgages if a lender agreed to take a loss on some of the loan principal, up to 90 percent or 97 percent of the new value depending on the borrower’s financial situation. Homeowners could be eligible for the refinanced loans even if they had made a couple of late payments.



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[sinkingfeeling]

1. What I would really like to see is that any 'help' be limited to 'primary homes'. There was a story

on ABC News last week about a couple, think they both were lawyers, who had purchased 2 or 3 Florida condo units before they were built. Now they can't find anybody to buy them and are having trouble making the 100% mortgage payments and are thinking about 'walking away' from them. These people were speculating on expensive real estate.

Any bailout to home owners should be limited to the property they live in.

[dysfunctional press]

2. i have NO sympathy for flippers who lost their nestegg...fuck them.

they should get exactly ZERO government help.

[Cronus Protagonist]

3. Another giveaway to landowners

When will they do something about exhorbitant RENTS charged by some of these people?