After shooting off his mouth about a veto, Bush signs housing bill

[ProSense]

Pelosi: Bush wouldn't dare veto housing bill

Bush signs housing bill in private

Four Kerry provisions included in Housing Bill head to President for signature

Jul 26, 2008 - 11:39 AM
Provisions will help thousands of Massachusetts homeowners survive declining housing market

BOSTON - Senator John Kerry announced that the Housing and Economic Recovery Act passed the Senate earlier today and is now headed the President's desk for his signature. The bill contains four key provisions, introduced by Kerry, which will help thousands of Massachusetts homeowners survive the nation's unstable housing market.

"This housing bill will help put our volatile housing market on the road to recovery. Foreclosures are devastating thousands of families across Massachusetts each and every day, and this housing package will throw them a lifeline. It will help to reduce the number of foreclosures, increase access to safe and fair mortgage credit for all homebuyers and help create much-needed jobs. I'm pleased that millions of hard-working Americans will finally get the help they need to get back on their feet," said Senator Kerry.

Four key provisions included in the Housing and Economic Recovery Act introduced by Senator Kerry:

• Kerry worked with Senator Gordon Smith (R-Oregon) to include the Mortgage Revenue Bond Provision, which provides an additional $11 billion of tax-exempt private activity bonds to housing finance agencies. The provision would allow the proceeds from the bonds to be used to refinance subprime loans, provide mortgages for first time homebuyers and for multifamily rental housing. This means that approximately $209 million in targeted mortgage relief will be available to the homeowners of Massachusetts, which could result in as may as 1,000 new loans in Massachusetts. Nationwide this would result in close to 87,000 additional loans.
  
• The bill also contains provisions to amend the Service Members Civil Relief Act (SCRA) by extending the period a lender must wait before starting disclosure procedures from 90 days to nine months after a service member has returned from active duty and capping interest on mortgages at 6 percent for one year after a serviceperson completes his/her services.
  
• The bill also establishes a National Affordable Housing Trust Fund, introduced by Kerry and Senator Olympia Snowe (R-Maine) which requires Fannie Mae and Freddie Mac to set aside a portion of their profits of which, 65 percent will be used for the Housing Trust Fund (approximately $3.4 billion over ten years), and 35 percent will go toward a Capital Magnet Fund to leverage affordable housing development and community development activities. In 2000, Kerry wrote the first National Affordable Housing Trust Fund legislation to construct, rehabilitate, and preserve 1.5 million units of housing over the next 10 years.
  
• The bill includes $3.92 billion for the Community Development Block Grant (CDBG) program which will help local communities fight the effects of foreclosure. Earlier this year, Kerry, along with Senator Edward Kennedy, sent a letter to the Senate leadership underscoring the need for $2 billion in additional funding for CDBG in the upcoming housing legislation.

[MadHound]

1. Yippee, rewarding greed and stupidity once again

Sorry, but having this money going to corporations that got greedy is wrong. Rather than bailing out Fannie and Freddie, on the taxpayers' dollar(and an unlimited line of Fed credit:wow:), we should be good little capitalists and let them bail their own selves out. But sadly, we're not in a true capitalist society, but rather a crony capitalist society where profits are privatized and the risks are socialized.

I also find it just simply wrong to be bailing out people who didn't do their homework, their research before taking out a mortgage. I'm sorry, but if somebody is offering you something too good to be true(O down, ARM with no background check) it usually is. For the vast majority of people buying a house is the single largest investment they'll make in their lives, and it is up to the home buyer to determine whether or not they can afford this burden and whether or not the mortgage terms are good ones. That means doing research, consulting advisers, etc. Instead people just jumped right in, attracted to the bright shiny McMansion and not caring a whit for what the real deal is. We shouldn't be rewarding this kind of stupidity.

Meanwhile, in tough economic times, those of us who have consistently done the right thing, stayed within our financial means, did our homework, didn't buy the hype, are once more going to be forced to pick up the tab for the mess left by the stupid and greedy. Gee, Fannie and Freddy are rewarded with influxes of unlimited tax money, stupid homebuyers are going to be rewarded with a bailout and low(down to three percent fixed) interest rates. When are those of us who did the right thing going to get their little pat on the back, get our reward?

This all stinks to high heaven.

[ProSense]

2. Sorry, I completely disagree.

I also find it just simply wrong to be bailing out people who didn't do their homework, their research before taking out a mortgage.

That argument smacks of the nonsense I've heard too long from Republicans (about people living in flood or fire zones). Shouldn't the people in New Orleans have known better?

The assumption that the mortgage crisis is the problem of people who didn't do their homework is simplistic.

[MadHound]

3. It's not an assumption, it's a fact

People didn't do their homework, otherwise why would they go ahead and purchase a house with no equity in it, that is way above their price range and an interest rate that could shoot up at any time? Sorry, but when you're plunking down your money and your financial future on such a large purchase you need to do your homework, and if you don't understand what you're getting into, find somebody who does and who can explain it to you. As the buyer you have every right to take the contract home, examine it, consult with others about it, etc. If you just walk in, sign it and move into the house, you're being stupid and courting disaster. Sorry, but a lot of people were stupid during the housing bubble and frankly I don't like paying for other people's stupidity.

I can understand that even the best of circumstances change, health problems, loss of a job, etc. etc. These aren't the people I'm talking about. I'm talking about those who bought a house that was too large for their budget to begin with, didn't do their homework, jumped at the hype of no money down and an initially low, but adjustable interest rate that bought basically on impulse. These are the people I don't want to bail out. If that sounds cold and cruel, so be it. My tax burden is already pretty hefty, especially since property taxes went up. Why should more of my taxes go to reward the stupidity and greed of these people with fucking 3% interest rates, which are a better rate than what most of us have gotten.

As far as building in flood plains, yes, that is stupidity too, at least here in Missouri. People did it for years and decades, build on the river and expect the taxpayer to bail them out when it flooded. Finally state government wised up and said that if you built on the flood plain, you're on your own. Most of the people who had lived there, engaging in a cycle of building, flooding, collecting the money and building on the river again finally moved on. Established river towns like NO and others are one thing, they usually have the infrastructure to deal with most floods. But individuals who build and rebuild, with no flood insurance, yes they are stupid too.

[ProSense]

4. No. "Why would they go ahead and purchase a house with no equity in it"? Again, simplistic,

and inaccurate: Why the Mortgage Credit Crisis Matters

From Obama's site Fact Sheet (PDF)

[MadHound]

5. No, sorry, it isn't simplistic

It may be politically incorrect to point out that many of the lenders were greedy, and many of the buyers were being stupid, but doesn't mean that such a conclusion is wrong. Nobody forced the buyers, at gunpoint or otherwise, to take out a loan that required no down payment and was an adjustable rate on interest. It was up to the buyer to protect their own financial interest, and if that meant deferring a housing purchase for a few years until they got a better deal, so be it, but that's what a responsible person does. Instead we had many, many people go ahead and jump right in, trusting to fate that everything would somehow turn out alright even though the odds were against it.

And then to further compound the problem, they used their homes like a goddamn ATM. While many people were forced to do this for pressing financial matters like health care and such, many others used home equities to buy toys and vacations. For instance my neighbor a few years ago bought four acres and a double wide trailer out in the country, a reasonable enough purchase. However he then proceeded to pick up two home equity loans and rack up his credit cards all for things like ATVs, a big boat, a large gas guzzling car, vacations, etc. Within the span of four years he was cleaned out, property foreclosed on by the bank last year. This scenario has been repeated many, many times over. Go to your nearest vacation spot for boaters and ask those people how they got those boats. Odds are, if they are middle class, they emptied their house out to do it. Stupid, stupid, stupid.

People in this country have had a mindset for years now that they could live the good life, live beyond their means, that in fact, they deserved to do so. This attitude is what drove the consumption and so called good times of the ninties. Rather than being smart, careful and frugal, they simply continued to borrow and the institutions continued to lend, and this whole house of cards got built up. Now that it has collapsed, those of us who were careful, who lived within our means are now expected to bail out those who were stupid, greedy and foolish. Gee, thanks, NOT.

Again, I'm not talking about people who were struck by sudden calamities, like a serious health problem, a lost job, etc. Those people need help, and I'm unstintingly willing to help them. But the vast majority of people who are hurting now got into their position through their own foolishness and greed, and they shouldn't be bailed out. If we do bail them out, we're rewarding stupidity, these people and people like them in the future won't learn their lesson, and we'll repeat this all over again in twenty-thirty years.

Yes, there was little oversight, and corporations were being greedy. We shouldn't reward them either, nor bail them out. But in this little scenario it takes two to tango, and the person who is getting the loan has the final say. As the saying goes, if something looks too good to be true, it probably is. But these people didn't do that, they let their own greed for that big house, or flipping a house overcome their better sense and plunged right in. And now they're going to be rewarded with three percent fixed rates, while those of us who did the right thing, or frankly anybody for that matter, can't get a mortgage for under six percent. Gee, how fucked up is that?

[ProSense]

6. It's simplistic because you are focusing on a tiny segment of the victims:

"People didn't do their homework."

You are assuming that this is the major cause of the crisis.

[MadHound]

7. I'm focusing on those people who took out either a no down payment loan, an ARM or both

"Some 36.6% of mortgages, including refinancings and new purchases, had adjustable rates last week, the Mortgage Bankers Association said Wednesday. That's up more than 3 percentage points from the prior week and 9 percentage points from a year ago.

The ARM portion was the highest since the group began collecting the data in 1990. The next-highest percentage was recorded more than a decade ago."
<http://www.usatoday.com/money/perfi/housing/2005-03-30-arms-usat_x.htm>

"ACORN noted that, while ARMs represent about 24 percent of all home loans nationally, in some communities and among some demographic groups they account for a much larger percentage of the mortgage pool. ARMS also make up about 75 percent of all sub-prime loans, a 50 percent increase since 1999."
<http://www.mortgagenewsdaily.com/8242006_Rate_Shock.asp>

Nearly a quarter of the homeowning population bought into an ARM. That isn't a "tiny segment", that's a huge demographic number. And yes, anybody who goes with a zero down, an ARM or both is being stupid. When that's they only kind of loan that you can qualify for, that is when it's time for you to walk away, save up some money, improve your financial position and try again in a few years. Owning your own home in this country isn't a God given right, but many people seem to that it is and will go to stupid and foolish lengths to own a home. Now they are going to get rewarded for their stupidity, and those of us who did the right thing financially get to pick up the tab. Is that justice, is that right? I don't think so. Especially when, with bad credit, a failed loan, and massive debt they are going to be getting a fixed rate that is three percent below what those of us who did the right thing can get. That's not right nor fair.

What's next, bailing out the average American who racked up an average $10,000 credit card bill?

[ProSense]

8. That doesn't tell me anything:

24% of home loans are "no down payment loan, an ARM or both"

This is describing a segment of borrowers, and it doesn't tell us if these are the borrowers being impacted. What about no money down only?

There are a lot of first-time home buyers programs and Veteran also use no down payment loans, it's part of their benefits.

Can you show that the crisis was caused by people who didn't do their homework and provide evidence that people who didn't do their homework are the majority of foreclosures?




edited word

[MadHound]

9. The name of the crisis should tell you

You know, the housing crisis, or better yet, the subprime mortgage crisis What type of loans do the subprime borrowers take out? Oh yeah, those pesky ARMs and zero down payment loans.

Also, if you look at this bill is signing, those 400,000 borrowers that this bill will help, they all have ARMs. Now it looks as though they will be getting below market fixed interest rates instead, thanks to us, the responsible home buyers and tax payers.

Yes, there are lots of first time home buyers programs, but none of them that I know recommend that the person take an ARM. In fact they discourage it heavily, as does the VA.

I don't usually like Wikipedia, but here is a concise and well sourced explanation of the current crisis
<http://en.wikipedia.org/wiki/Subprime_mortgage_financial_crisis> I'm sure that by following the links, or doing your own research you will find plenty of material to back this up.

Frankly, on the face of it, if you take out an ARM, unless you have really special circumstances, you are making a foolish and stupid move, especially if that is the only kind of loan you can get. As my friends in finance say, a zero down ARM mortgage is a recipe for disaster. This has been a well known fact for years and decades, but again, people got stupid and greedy.

[ProSense]

11. This is all your opinion

You claim the crisis is the result of people who didn't do their homework. Now you say:

Frankly, on the face of it, if you take out an ARM, unless you have really special circumstances, you are making a foolish and stupid move, especially if that is the only kind of loan you can get.

Funny, at the Wiki link you provided, there are a long list of complex reasons for the crisis and the role certain groups played in facilitating it, but nothing about stupid people who didn't do their homework.

[MadHound]

12. Taking out an ARM, unless under real special circumstances, is a defacto stupid move

Go check with your financial adviser, or any financial adviser.

And while my Wiki link goes into great detail( a good thing) it states this right up front: "The subprime mortgage crisis is an ongoing economic problem manifesting itself through liquidity issues in the global banking system owing to foreclosures which accelerated in the United States in late 2006 and triggered a global financial crisis through 2007 and 2008. The crisis began with the bursting of the US housing bubble<3><4> and high default rates on "subprime" and other adjustable rate mortgages (ARM) made to higher-risk borrowers with lower income or lesser credit history than "prime" borrowers. Loan incentives and a long-term trend of rising housing prices encouraged borrowers to assume mortgages, believing they would be able to refinance at more favorable terms later. However, once housing prices started to drop moderately in 2006–2007 in many parts of the U.S., refinancing became more difficult. Defaults and foreclosure activity increased dramatically as ARM interest rates reset higher. During 2007, nearly 1.3 million U.S. housing properties were subject to foreclosure activity, up 79% from 2006.<5>"

So let's see, the subprime crisis originates in ARMs and zero down subprime loans to people who weren't doing their homework. Hmm, sounds like a lot of stupidity and greed to me.

[ProSense]

15. Where in that paragraph does it say people didn't do their homework?

"Go check with your financial adviser, or any financial adviser."

Are you assuming everyone has a financial adviser and that the adviser didn't tell them this was a good move?

[MadHound]

19. Let me guess, you have an ARM

Either that, or you're being intentionally obtuse. Like I said earlier, getting a zero down ARM mortgage is, in and of itself, a sure sign of financial stupidity. The vast majority of financial and economic experts would agree with me.

No, I'm not assuming that everybody has a financial adviser. However if you are buying a house and don't understand what you're getting into, you could, and should, hire one. I repeated this one for you before.

[ProSense]

22. Your assumptions and guesses have all been wrong. You seem to be OK with

being intentionally obtuse by implying that financial advisers never recommend ARMs to anyone.

Opinions about ARMs aside, do you seriously believe people don't get bad advice from experts?

[guruoo]

18. Ahh, because they were conned into believing they could afford it by..

by an agent motivated by closing commissions, or kickbacks?

[MadHound]

20. When you're buying a house, you can only get conned if you allow yourself to be conned

You have, as the buyer, the legal right to thoroughly examine the contract, consult advisers, etc. etc. If you don't understand the contract, and yet continue the process of closing the deal and buying the house, then you are being foolish.

[guruoo]

23. Exactly what dishonest mortgage co's, and cheap labor Republicans want people to hear

[Max_powers94]

10. Yall need to read the details of this bill

this bill is also so a bailout for big business.

[MadHound]

13. Oh I realize that, I mentioned that in my first post

However the OP and I have been debating the role that buyers' stupidity played when they continued to take out zero down ARM after ARM.

But yes, I find the notion of an unlimited line of taxpayer credit to Fannie and Freddie infuriating also. Greedy lenders and stupid buyers are being rewarded with this bill, at the expense of those of us who did the right things and made the right decisions.

[Major Hogwash]

14. You mean all those "stupid buyers" that lost their jobs in the last 4 years?

Wow, you're such a good latte slurping peace activist, aren't you?

[MadHound]

21. Gee, if you would go back and read my previous posts on this thread for comprehension

Rather than for outrage, you would see that I exempt those who lost their jobs from my criticism. I'm fully cognizant, and sympathetic with the problems that accompany job lost, or the loss of one's health.

No, the people that I'm criticizing are the the ones who willfully went into a contract that they couldn't afford and that they shouldn't have entered into. Sorry, but zero down, adjustable rate mortgage is a big red flag that everybody should heed.

As far as being a "good latte slurping peace activist" well, I hate lattes, have worked hard all my life to bring about peace, and utterly despise assholes who either can't or won't read what has been written down, whose criticism consists of insults and ad hominem attacks and who think that their cutesy little insults are actually valid discussion. Sucks to be such an asshole, eh there Major?

[Major Hogwash]

24. Wow, what a worthless bag of hot air you are! Sucks to be such a bag of hot air, eh, MadHound?

This bill actually helps people save their homes, but Mr "I-know-better-than-everyone-else" doesn't agree with it.

Too bad.

[Major Hogwash]

16. Geat article, ProSense! As usual.

I especially like the part of the bill that protects our servicemen from not having their homes yanked out from under them while they are serving over in Iraq!!

I knew that was something that Kerry has tried to get through the Senate several times before.

[ProSense]

17. President Signs Bill Into Law to Create a National Housing Trust Fund

President Signs Bill Into Law to Create a National Housing Trust Fund

WASHINGTON - July 30 - Today, President George W. Bush signed into law a bill to create a national Housing Trust Fund, the first new federal rental housing production to specifically help the lowest income households in the U.S. enacted since 1974. The Housing Trust Fund is one of the many provisions of the Housing and Economic Recovery Act of 2008 that the President signed early this morning.

The Housing Trust Fund’s most important features are:

· It is a permanent program with a dedicated source of funding.

· At least 90% of the funds must be used for the production, preservation, rehabilitation, or operation of rental housing. Up to 10% can be used for the following homeownership activities for first-time homebuyers: production, preservation, and rehabilitation; down payment assistance, closing cost assistance, and assistance for interest rate buy-downs.

· At least 75% of the funds for rental housing must benefit extremely low income (30% of area median income or less) households and all funds must benefit very low income households (50% of area median income or less).

Fannie Mae and Freddie Mac are required to make annual contributions to the Housing Trust Fund, which will be administered by the U.S. Department of Housing and Urban Development (HUD). HUD will make grants to states, which will allocate funds to qualified organizations and agencies to build and operate rental housing that is affordable to people employed in the low wage work force and to the lowest income elderly and disabled people in our country.

The amount in the Housing Trust Fund had it been fully implemented in 2008 is estimated to be about $300 million. This amount is expected to grow over time. The bill also allows Congress to “transfer, appropriate, or credit” other funds to the Housing Trust Fund.

“Today marks the return of the Federal government to the business of supporting the production of rental homes for families whose incomes are too low to afford to rent decent homes in today’s housing market. There are 9 million extremely low income renter households in the U.S. and only 6.2 million homes renting at prices they can afford. This is a longstanding crisis that has been ignored by federal policy makers for too long. The enactment of the Housing Trust Fund offers these families hope for more stable homes and healthier, more productive lives,” said Sheila Crowley, President of the National Low Income Housing Coalition, which leads the National Housing Trust Fund campaign.

“The National Housing Trust Fund campaign is deeply grateful to Representatives Barney Frank (D-MA) and Maxine Waters (D-CA), and Senators Christopher Dodd (D-CT) and Jack Reed (D-RI) for their leadership in getting the Housing Trust Fund passed,” said Crowley. “Senators John Kerry (D-MA) and Bernie Sanders (D-VT) also must be congratulated for being early and committed champions to this cause.”

The National Housing Trust Fund campaign has been endorsed by more than 6,000 organizations and state and local elected officials. For more information, go to www.nhtf.org.

The National Low Income Housing Coalition is a membership organization dedicated solely to ending America’s affordable housing crisis. NLIHC educates, organize and advocates to ensure decent, affordable housing within healthy neighborhoods for everyone.

The National Low Income Housing Coalition recognizes journalists who do an exemplary coverage of the affordable housing crisis. For more information, go to www.nlihc.org/cndma.

Kerry's press release:

BOSTON – Senator John Kerry issued the following statement on the Housing Bill signed into law today by President Bush. The bill contains four key provisions, introduced by Kerry, which will help thousands of Massachusetts homeowners survive the nation’s unstable housing market.

One of the provisions included in the bill establishes a National Affordable Housing Trust Fund, which requires Fannie Mae and Freddie Mac to set aside a portion of their profits of which, 65 percent will be used for the Housing Trust Fund (approximately $3.4 billion over ten years), and 35 percent will go toward a Capital Magnet Fund to leverage affordable housing development and community development activities. Senator Olympia Snowe (R-Maine) introduced the bill along with Kerry.

In 2000, Kerry wrote the first National Affordable Housing Trust Fund legislation to construct, rehabilitate, and preserve 1.5 million units of housing over the next 10 years.

“For too long, our nation’s poorest citizens have gotten the short of the stick when it comes to housing. By establishing the National Affordable Housing Trust Fund we will help our most vulnerable families live in decent, safe and affordable rental housing,” said Senator Kerry. “Foreclosures are devastating thousands of families across Massachusetts each and every day and this housing bill will finally help them stay in their homes and help put our economy on the road to recovery.”

“The National Housing Trust Fund campaign began under Senator Kerry’s leadership when he introduced a bill to establish a National Affordable Housing Trust Fund in 2000. With the enactment of the Housing and Economic Recovery Act of 2008 today, together we have achieved success. The result is a renewed commitment by the Federal government to solving the housing problems of the very poorest families in our nation, who have been overlooked and neglected for too long,” said Shelia Crowley, President and CEO of the National Low Income Housing Coalition.