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Subscribe to RSSA leading housing regulator on Monday announced changes to a government refinancing program that could help up to one million homeowners of the estimated 11 million whose homes are worth less than their mortgage.
The Federal Housing Finance Agency, which oversees mortgage finance sources Fannie Mae and Freddie Mac, said it was easing the terms of the two-year-old Home Affordable Refinance Program, which helps borrowers who have been making mortgage payments on time but have not been able to refinance as home values have dropped.
To help underwater borrowers, or those whose loans are worth more than their homes, FHFA said it will scrap a cap that prohibits any homeowners whose mortgage exceeds 125 percent of the property's value from participating in HARP, which is targeted at loans backed by Fannie Mae and Freddie Mac.
"Our goal in pursuing these changes is to create refinancing opportunities for these borrowers, while reducing risk for Fannie Mae and Freddie Mac and bringing a measure of stability to housing markets," FHFA's acting director, Edward DeMarco, said in a statement.
After meeting with DeMarco earlier this month, one lawmaker said the expanded program could help as many as 600,000 to one million borrowers. But that is only a fraction of the estimated 11 million homeowners who are underwater.
President Barack Obama is expected to promote the initiative during a speech Monday in Las Vegas. Obama will also use the trip to raise money for his re-election campaign.
But even the White House is uncertain about how many homeowners it could help. White House economist Gene Sperling said Monday it was too early to project how many struggling borrowers would "benefit from the changes announced today or could be announced in the future."
The New York Times reported Monday that the initiative was part of a program the president would be rolling out to address the nation's economic woes in the face of congressional Republicans' reluctance to pass his jobs plan.
It is the latest White House effort to deal with a key factor stalling the economy -- a crippled housing market -- and adding to political liabilities for Obama, whose re-election bid is already imperiled by stubbornly high U.S. unemployment.
It remained unclear whether the Obama administration's revised approach, which falls short of an overarching plan that some experts have said is needed, will provide enough of a boost to the battered housing market to spur the stagnant U.S. economic recovery.
Earlier federal programs to curb housing foreclosures have failed to yield the benefits initially promised.
To encourage banks to participate in the program, FHFA is revamping it to protect lenders from having to buy back HARP loans if underwriting problems are later found. Banks will only have to verify that borrowers have made at least six of their last mortgage payments and the new rules eliminate the need for appraisals in most cases.
FHFA said government-controlled Fannie Mae and Freddie Mac will waive certain fees for borrowers that refinance into loans with a shorter term, such as 15 years, aiming to spur homeowners to pay down the amount they owe at a faster rate.
HARP, one of the Obama administration's anti-foreclosure efforts, was unveiled in March 2009 and was expected to help as many as 5 million borrowers. So far, however, only about 894,000 borrowers have refinanced their loans through the program.
FHFA said it will extend the effort until Dec. 31, 2013. The program is limited to loans that Fannie Mae and Freddie Mac guaranteed before June 2009.
The Federal Reserve weighed in on what to do about housing Monday, too. A top Fed official said the nation's central bank could do more to drive interest rates lower to help housing, Reuters reported. The remarks by New York Fed president William Dudley marked the second time in a week that a Fed policy maker highlighted the possibility that the U.S. central bank could do more to support the housing market.
"Breaking this vicious cycle is one of the most pressing issues facing policy makers," Dudley said in a speech at Fordham University's Gabelli School of Business in New York.
Related stories:
A guide to the new mortgage refi plan
Reuters and The Associated Press contributed to this report.
CNBC's John Harwood has the details on President Obama hitting the campaign trail with homeowner relief.
Leave a Comment:
So now Obozo is so desperate that he is now buying homeowner votes just like he did the union thug vote. Sorry will not work.
ren,
I am sorry for YOU! Your total lack of respect for the president of the United States is a telling fact about your character! Know what I mean?
People watch FOX because it reinforces what they already believe.
No amount of factual information will change their minds.
Even if a little factual information did manage to leak in, it would only confuse and enrage them.
scrambolo: I know what he means. Obama may lie his way into another 4 years and complete the fundamental transformation of America to dictatorship as he wishes with sharia law the rule of America. He is to be feared not worshipped.
Ren: Of course in your "Amerika" mentality your wish is that nothing works. What for? In the end the people who will benefit from this are just "Americans".....
People watch MSNBC because it reinforces what they already believe.
No amount of factual information will change their minds.
Even if a little factual information did manage to leak in, it would only confuse and enrage them.
Good post ren. Odumbo is also offering a balout all he student loans whcih could cost a trillion dollars - high taxpayer scost to buy the student vote. Have to watch Fox News to hear about that one since the Lame Stream Media only gives the lemmings teh White House talking points and is pure liberal propaganda.
So what if you house is worth less than you owe on it! I'm supposed to bail you out for that?! Look, people got into houses that they could not afford, and think they were owed their house appreciating in value. There is no guarantee that a house will appreciate in value!
So if you bought a house with an adjustable, hoping to make a profit killing 5 or 7 years later, that is your problem, not mine. Tax payers should not have to pay for the idiots that bought what they could not afford!
Let's see, more Chinese money to pay for more failed American policy.
Ron Paul predicted the out come long ago. He's they only candidate that if elected will get something done, besides tinkering around the edges.
Here on Meet The Press:
http://www.youtube.com/watch?feature=player_embedded&v=Gfth22IuyXU
Sorry he's not as polished a speaker as our corporate sponsored candidates.
Great more bad government backed loans. Just when you think this *sshole in the White House can't do one more thing to screw up the economy, he finds an even more foolish way to damage it and destroy us taxpayers.
Aren't all you people that play by the rules, purchased a house you could afford, and pay your mortgage happy that President Poverty Pimp is now going to have you pay the mortgages of those that didn't....and all for a few votes.
Could some real adults start posting here. I hear way too much junior high school immaturity coming from some of you posters to even begin to take you seriously - Obozo and Odumbo? Really? Grow up!
JPSOTW:
Exactly! I am so tired of bailing out people that do stupid shi*! You bought a house you couldn't afford - then you shouldn't have the house - simple. The metality of being owed has got to stop, or we are ruined as a nation.
People need to own their decisions!
Here we go again.
Part of the process of home buying is realizing that home values are not guaranteed...they go up, they go down. There is no magic formula for reversing people's bad decision to buy a house they can't afford to pay for. But leave it to leftist government bureaucrats to try; afterall, there is an election next year.
Folks if you cant afford the home, give it up!!!
The more Washington tries to dig you out of the mess, the more you dig yourself into the mess...and the more ya hurt the economy.
It's folks like you that's draggin the economy down...people like you need a big ass whoopin and the book "Economy for dumb asses made even easier"
You read this article and they are trying to help some of the American people and right away you all comment on Obama is so bad. Wouldnt it be worse to let these people forclose and now you have more Americans without a place to live and the banks with homes they cant get rid of. He stepped into a mess from the Bush administration and you all point a finger at him. Congress wont work with him which has started the occupy people on a tizzy. he killed Bin Laden and you still question his safety measures for our country. Now when our troops come out of Iraq and the Civil war starts please dont blame him because we all knew that was coming because the sunhis and the shiats hate each other. So let them kill each other as long as our troops our home. Thats if they can afford it. This article also fails to mention the other companies out their who lend people mortgages, this just applies to fannie mae and freddie mac!
What happens to the loans that were made at the higher rates and sold to investors? Does the taxpayer have to make up the difference, as usual? And without being able to vote on it?
Ah, Obama's approval numbers are up, so here come all the Koch employees.
This could prevent 500,000 to a million more foreclosures. It's a good move.
Heck, the Republicans won't do anything about it, as they have to protect the banks that did the derivatives trading.
jeanette-1501466 - Have you taken your medication this morning? Please leave your keyboard now and take your pills. You'll feel much better.
You all know this is a Bush porogram...
People watch faux because it reinforces what they already believe.
No amount of factual information will change their minds.
Even if a little factual information did manage to leak in, it would only confuse and enrage them.
Joeyc71 said:
No, it wouldn't be worse to let these people foreclose. Look, a lot of people made stupid decisions when buying a house. They need to pay for that decision, not the rest of us. And they will have a place to live. If they are paying the mortgage or part of it, they can pay rent somewhere else. If they aren't paying the mortgage, they have no right to stay in the house - it is no longer theirs!
Careful what you ask for. These homes that under water, if forclosed, will sell at a discount. Then you will have renters and other people that couldn't afford to live in your neighborhood moving in. What's that going to do to your home values? What's that going to do in your neighborhoods? Many people are under water because they lost their jobs through no fault of their own and not because of buying more than they could afford. I love the compassion on the right.
Mitt Romney’s solution to the housing crisis in Nevada — foreclose on thousands of unlucky families so investors can scoop up real estate bargains that they can rent out — perfectly illustrates the real agenda of Wall Street and the GOP: return us to the two-class landlord system of Dickensian England, where the wealthy, aristocratic lords owned all the land, and the other 99 percent, the working class and peasantry, had to rent from them.
Wake up, America! When the middle class is gone, so is the American dream.
Hey, all you hardcore right-wing types are exactly right........if people cannot afford to live in the home they have, despite the economy or lender-opportunism, then f--- 'em!!! LET THEM EAT CAKE!!!! RIGHT???
I mean, WHY THE HELL should I have to pay more in taxes just to allow the government to assist people in getting their loans straightened out, when we could just evict them and spend the money we saved on some new military adventurism. Heck, we could even do the Christian thing (the 'ol "help your neighbor" thingy) and buy them some large cardboard boxes to live in near the new Hoovervilles that will soon be popping up. Hey, as long as those pesky goddamned "libtards" keep paying their own money to charities, we won't have to worry about anyone's kids starving, right?
BECAUSE REMEMBER FOLKS, IT ISN'T SOCIALISM IF IT INVOLVES WAR!!!! (But to help anyone get out from under these criminal loans, is, well, criminal!)
On a more serious note, I do believe this attempt by the administration is a bit "too little, too late". Not to mention the timing does indeed appear to be political. SO, what else is new?
There is no need for this program. It was commented that they only had to prove they paid on time 6 out of the last 10 payments. If they're making payments on time, then they don't need any help. They need to continue to pay off the mortgage. At some time in the future, the house value will go back up, just because it isn't that high today, doesn't mean we need to bail them out. If you are stupid enough to believe that mentality, then all new car loans should be bailed out, since the car drops in value as soon as it leaves the car lot.
Homes should be considered long term purchases, not something to flip. It is not the American taxpayer's responsibility to bail out fools.
This move is only to buy votes, not do what is good for America.
DOUCHEBAGS posting in their typical fat, pink, vein popping face way. They don't even read the article. So what is their point in posting? To be douchebaggers. A joke that a lot of them think they are Christians.
Anyway, of course the left will like whatever their President does, but this: "which helps borrowers who have been making mortgage payments on time but have not been able to refinance as home values have dropped," is not a bad plan. Banks have such tight sphyncters that they still won't lend to good lenders. So BYPASS them. Credit unions are already seeing a huge influx of customers from the move to charge to use your ATM card. This move may put some pressure on banks to do their job again in regards to lending money to actually good borrowers (as opposed to not lending, or lending to people who can't pay back).
DOUCHEBAGGERS don't have the intelligence to comprehend this because they don't want a fiscal solutions. YOU can only get your job and a good life AFTER a Douchebagger gets what they wan't. And they are mad at you for disagreeing with that. Mad, with fat faces and wearing pink skirts. Sort of like pigs in expensive clothes.
.
it's MSNBC turning in ANOTHER RIGHT WING RAG ?
I found few post using foal language. Where is TYler ?
Is Tyler aware but he is turning a blind eye ?
scrambolo:
Paying MORE money for homes that are NOT WORTH what the people paid in the beginning it DUMB;
Why should the rest of us pay for their overpaying for a home???
MORE COMMIE economics!
You know, many of you are harping about people who "apparently" purchased homes they "could not afford." However, that's not correct in most cases. When people purchased their homes, they had jobs, they had health care, etc. A great many of them, in the last few years, LOST that job, LOST that healthcare, LOST all their money in their 401(k) plans. So, please STOP putting the blame on people for purchasing their homes when they COULD afford them! I'm sure that 95% of people who purchased homes several years ago when homes were worth more did it because they KNEW they could afford the home at that time....but, @!$%# happens! To blame them for something they could not foresee is ridiculous and you should ALL be ashamed! I can't believe that people are so lacking in compassion that they wish ill on their neighbors, friends, relatives, etc. I know, for a fact, that everyone has at least ONE friend, neighbor, or relative that has lost their home due to unforeseen circumstances! There for the grace of God go ALL of you! Give me a break! Grow up and act like adults for a change! This could have been YOU!!
Yes... let nothing be done and the forclosures play out until the housing market hit bottom, allowing investors to purchase these homes as cheap as chips, fix them up and rent them out to those who no longer own the homes.
Yes lets follow the Romney plan.....He said it last week.
That is the Romney plan for helping homeowners...make them homeless first, then let them live on the streets because the cost of rent has increased to where the amount of rent being charged and paid in some areas for an apartment is even higher than a mortgage payment on a house.
Question ....do you folks really want nothing to be done to stem the tide of forclosures/short sales? If so why?
Question... do you realize that the forclosures and short sales are dragging down your property value too?
Question.... is your house that you purchased with 20% down still worth what you paid for it or has the value fallen drastically?.
Question... do you still have any equity in your home (from the 20% down)?
Question.... do you believe the banks are actually serious about stemming the tide of forclosures?
Question... do you believe that the economy will improve if more people lose their jobs?
Question... will you be able to afford to pay your mortgage (or rent and utilities etc) if you should lose your job or the value of your 401Ks, IRAs, Savings etc continue to lose value?
Question... To those who are retired.... (a)if things do not change regarding the housing market and the continued loss of jobs .. will you or have you started to tap into the principal as opposed to being able to use just the dividends from your investments?
(b)How long do you think your investment/pension funds (principal) will last..... 10 years, 15 years? 5 years, 1 year?
Question.... what do you all believe that a Romney, Perry, Cain or a Backmann will do for you and the country? How will you be better off if one of those candidates become president? How will they help your financial state?
Question...Homeowner.... have you had an appraisal done on your home recently for assessment of present value?
You should have an appraisal done even if you are not selling.... it can be eye opening.
What the right-wingers on this site fail to realize is that if the homeowners decide to short sell their homes or let them be foreclosed on the value of all homes in the neighborhood go down. By allowing the owners to refinance to a lower rate these people are more likely to hold onto the homes. this protects the entire neighborhoods. But, all that is lost on the losers who have to call our President names. What more would you expect of people with such low IQ's?
You sound like an incredible snob, very frankly. I don't think people who rent are intrinsically inferior to people who own. There are some very legitimate reasons why someone would prefer to rent. That doesn't mean they can't be a fine neighbor. Look, for "renters" substitute "African Americans" or "Hispanics" or "blue collar workers". Do you hear how you sound?
I consider my own home a place to LIVE, not an investment. I like living in a multicultural, fun, tolerant inner city neighborhood a few blocks from several major universities where I can walk to everything and be downtown by bus in 10 minutes. I had a house in a "better" neighborhood but sold it because the people there were insufferable. You can be a real estate investor, and I've been one myself, but you should only live somewhere because you actually like it there. If home prices have been inflated over their true value, they SHOULD go down. They'll go back up eventually because everything does. Don't ask the taxpayer to bail you out.
Hey, I own my home outright. If I can prove that it has gone down in value, will Obama send me a check for the difference???
So many witty comments spoken by people whose greatest purchase was probably the last Call of Duty game.
As a homeowner, it's one thing to buy a $500,000 dollar home, easily afford a $2000 a month mortgage payment, and live happily ever after. It's another thing to suddenly find your mortgage payment doubled to $4000 a month, with no warning, and then when you attempt to refinance it back to a lower level, be told your home is only worth $75,000 now so sorry, you're S.O.L.
It's sad to read so many ignorant comments by people who think they are better than those folks being f-cked over by things they had no control over. Tell you what, grow up, take on some real responsibilities, and then come back here and brag about how easy things are.
Didi:
Sorry, most people that are in trouble with their homes is because they bought what the could not afford. I have absolutely no sympathy or compassion for that. And for the people that have lost their jobs, well unfortunately, their will always people that lose jobs or have unforeseen events take place in their life. That doesn't mean that the answer is for the taxpayer to bail them out, subsidize or pay their debt. Sometimes they will have to give up the house, and either buy something cheaper or rent. Nothing in life is a guarantee and we can't be responsible fiscally for every thing that happens to everyone. Unfortunately, life happens!
Chris, let's start with your "ignorant comment"....
If "you" are making enough money to be able to afford a $500,000 home, then "you" should be intelligent enough to read the contract, and not choose a variable rate loan. If "you" do choose the risk, "you" should also be intelligent enough to calculate the maximum possible increase in payment when the initial percentage expires. All of the terms are listed in the contract. There is "no warning." It is not the rest of America's responsibility to pick up after "you" when "you" make poor choices. Next time, don't assume "you're" entitled to whatever "you" want NOW. "You're" not.....
Chris from Yucaipa said:
Sorry, more excuses. They were warned and they had total control over the choices they made! They agreed to the terms of their loan. And everyone who bought a house with an adjustable knew damn well their payment would go up after the initial low interest rate time period. Mortgages with fixed rates do not go up. People took a gamble on the short-term low interest loans. Some have lost - that isn't the problem of the rest of us. And no lender owes it to you to re-finance your loan. People need to take responsibility for their choices and decisions. They rest of us who work hard to pay for our personal choices and responsibilites shouldn't be paying for greedy people hoping to cash in on their house or who bought something they had no business buying.
And for the people who lost jobs or had some other unforeseen life event, that will always be something that can happen - doesn't mean the rest of us give them a house.
The DOUCHEBAGGERS are still not talking about the article at hand. Not a surprise.
My God, this is a stupid statement.
jeanette,
I doubt very seriously that even YOU believe your post #1.3!
U.S. dictatorship? Better check the definition of the term before saying that Obama is a dictator. The latest is that we have a president who is elected by the people. In Obama's case, he received 54% of the vote in 2008!
Shiria Law? Can you tell me even ONE court of law in the United States allows Shiria Law to be the law of the land? No? Next!
Obama is to be feared not worshiped? I do not know anyone who 'worships' any human being, do you? And as to fear, he is only feared by those who are really uninformed and easily swayed by emotions and not FACTS and/or Logic! BOO! Happy Holloween!
And tell me please, Does the term 'Obozo' attached to OUR president make you feel warm and cozy? If yes, then you are also disrespectful of YOUR president and by extension the United States of America which elected Barack Obama President in 2008?! Please, don't worry you'll grow up in time, I hope!
Bailing out markets of any kind is a mistake. Continuing to do so year after year is insanity, or corruption, or both.
All this does now, after millions have lost their homes, is to extend a false home value to the market.
If these homes are foreclosed on, the overall market value continues to drop, and Joe Public can finally afford a home.
Bailouts of this kind only satisfy the few (the article states less than 10% in trouble will be helped), while enriching banking and in a larger sense, the real estate market.
For all of us who have rented, given all our rent money without a tax advantage, we are doubly screwed, as inflating home prices also inflates rental prices.
So thanks for nothing you commie dogs, it is clear you are still in the back pocket of banking.
The liberals who support this action, and Obama, are the real fools, all the while giving lip service to OWS.
Well, this isn't really a bailout as as much as providing people with underwater mortgages an alternative to just walking away from their property. However, that note about dropping the requirement for an appraisel looks like some major Mortgage Fraud just waiting to happen. The real problem is, there is no way to make Banks use the windfall they got from TARP to help out individuals who, like those banks, made stupid decisions. So back as much refinancing as you want, the Banks would rather squeeze those people until they pay what's owed under the original, unrealistic agreement, or grab their property.
Paul F,
You are just great a calling others names, like fools and 'commie dogs'. However, you are just absolutely wrong with your economic prognosis. Better take a macro economics or a micro economics class before you get in over your head again as in your post #1.42. Sorry to be so critcal, but you are as far from the economic truth as you can possibly get. Point: "rents are increasing as housing prices increase". Actually home prices have been falling, and continue to fall, since 2007 in most major markets in the United States. Rent prices have actually been stable or slightly increasing, as people are displaced from their homes. Take a close look at the below Zillow demographics for home ownership and rental prices in the last few years. Furthermore, when these people lose their homes, and many have and will in the near future, they are desparate and crime will increase. If their children have no home or stability there will be revolution in the U.S. It is as assured as tomorrow! How do I know? I have also had several history courses and history is replete with the revolutions caused by redistribution of wealth. What do you think is going on in the Middle East NOW! You may say, can't happen here! DON'T BET ON THAT WITH YOUR FUTURE AS THE STAKES!
http://www.zillow.com/local-info/#metric=mt%3D46%26dt%3D1%26tp%3D4%26rt%3D2%26r%3D102001%252C9%252C43%252C54%26el%3D0
Really, you can learn a lot with a college course or two in the principles of economics. Good Luck!
@ zoroaster - just because the home is worth less than when the mortgage was taken out, is not a reason to walk away from it. Like I said in my first post, by that reasoning, everyone should walk away from their loans for their new cars, as they become worth less than the loan as soon as it is driven off the lot. If you can still pay for it, keep doing so, the more you pay, the better your situation will become.
Think people!
How in the hell do you come up with this nonsense? It's so freakin' absurd it's pathetic.
what the f------ what else must the tax payer pay for/..its not the government that pays for all this its me and i cant get a easy payment for the house i brought in nc.....listen let the banks...handle this..they are the ones that let these idots buy the house!!!! let it fall..we will come back..quit putting money in a fail ship.....
"To encourage banks to participate in the program, FHFA is revamping it to protect lenders from having to buy back HARP loans if underwriting problems are later found."
Translation: Obama needs the votes and needs you to hand out money on his behalf, don't worry we are changing it so that if the loans go bad the already bankrupt Freddie And Fannie (A.K.A. TAXPAYERS) get the bill.
Boy Obama sure is tough on banks isn't he?... hey buddies go buy me some votes, don't worry, if you loose money the sheep will get the bill... if you make money you keep it... you can't loose.
In case you missed it, banks aren't lending. Some people who have worked hard and did everything right are getting screwed in the meantime.
If you have a better solution I would be willing to listen.
I just wish he had done this sooner.
All these programs are doing is prolonging the inevitable for most of these people. They can not afford the homes and are better off to just get out from under them already instead of continuing to struggle to afford a home they never should have bought in the first place. This program is not going to change the fact that they owe far more than their home is going to be worth any time in the near future, say at least a decade or more. These attempt to prop up the housing market are only making matters worse for everyone involved. Also, if they do go through with this program it should be restricted so that those who refinanced to take equity out during the boom are not eligible. People who took equity out of their homes to go on extravagant vacations, buy new cars, buy boats, etc. should not be rewarded for their poor choices with government help now.
I am new of those people who would benefit from this. I have excellent credit but i owe more on my house than its worth. I don't plan on getting rid of my house. It would be nice to be able to refinance from my 6.0 rate to 4.5%
A lot of good ideas should have been done sooner.
Unfortunately, we have a Republican-obstructed Congress that is willing to take down America in order to take down Obama.
Get real, Reid couldn't get enough democrats to support the jobs bill. Another obama lie. He excels at lying.
Pjam: Bottom line, nothing that may help Americans will work for you or for the GOP/TP breed....
How lame....!!!!!
terriels said:
They didn't do everything right if they bought houses they can't afford. The biggest purchase ofyour life and your going to gamble on the house being worth a huge amount more so you can re-fi in 5 or 7 years when the loan adjusts? If you can't afford the adjustment rate, you should get a fixed or a cheaper house. To buy a house assuming the value will go up a certain amount, or at all, is foolish at the least!
Obama is at least dealing with the housing situation. It's clear the Republicans won't help anything that has to do with the economy or jobs.
Eric: Republicans will not help? Who created the HARP program?
Oh come on. Kick the FOX News habit and seek actual facts. The vast majority of people who are in trouble with their mortgage didn't "refinance" for boats and vacations. You're thinking of the top 1%. Over 15 million American workers have lost their jobs over the last 10 years. They weren't lazy, they did everything right, but when the company you work for considers profit over patriotism...that's what you get. The economy in the toilet.
And who's complaining about it now?
Eric, there's not much the govt can do. They like to pretend they know what's going on but they don't. They pretend to care but they don't. They got theirs, heck with you. Regards....
December 22, 2008 04:45 PM
Bush's ownership society scam exposed by the NY Times
By John Amato
The Bush economy was based mostly in part on the housing and mortgage markets. With no regulations in place, a wild west type monetary explosion hit and fueled Bush's "ownership society." While the scam worked, it infused tremendous amounts of cash into the economy which consumers spent very aggressively while also racking up their credit card debt. This also made the rich, much richer. 1920's rich. When that unraveled we had a complete economic meltdown. The NY Times hits it up with a piece called: White House Philosophy Stoked Mortgage Bonfire
I'm smelling another bailout here for these people (Banks). However, I feel that if you cannot afford your home, then it's time to downsize and move into a smaller dwelling until you can buy a home and pay for it in full.
Too many people were buying homes these banks knew they couldn't afford, and we should be penalizing the banks for unethical practices like they have done over the years.
No more bailouts or big businesses or banks. Let them all fall, and then let the next new entrepreneur take hold of the reins.
We shouldn't be rewarding failure as Obama has done with all these banks and big businesses.
We need new leadership, not old thieves (Donald Trump) that are allowed to continue running our banks and businesses in America.
Paying MORE money for homes that are NOT WORTH what the people paid in the beginning it DUMB;
Why should the rest of us pay for their overpaying for a home???
MORE COMMIE economics!
Harbinger-2218646;
You must live in fantasy land!!! The DEMS have done nothing but print money and give it to their pals the unions.
Go out get a job and pay some taxes! I bet you are in the 47% that pay NOTHING!
How does it help people seeking loans to get one ? I see people wanting to sell when they are upside dpown will have to write a big check to sell their house without a bailout - I mean a HARP readjustment, where the taxpayers takes it in the ear. But a homeowner who was in the house long enough to pay down the loan and is not upside down merely forfeits the equity earned on cash they already paid the bank ! They get to eat their loss while a person who has not been harmed yet gets everybody worrying about them and setting up a plan to take care of them. they are upside down but not harmed until they sell. Why declare one set of homeowners worthy of relief and the rest must just take their losses? Each time the gubmint messes with it they just make it worse.
This is an economic band aid covering up the underlying issue. At some point the pain will have to be paid for the underlying problem. People bought homes at too high a price...the loss has to occur to allow the markets to stablize. Giving low cost loans does not fix the problem...it covers it up.
Anyone happen to notice that the TEA heads do not understand what 'refinancing' is? Refinancing will help people continue to pay the principal that was borrowed. What takes a hit are the bank's profits.
In today's market, a foreclosure would mean loss of all profit plus 25 to 50% of the principal. That loss would be transferred to the government because of the Freddie and Fannie guarantees. Refinancing those mortgages instead of forcing them into foreclosure actually saves government money.
Hasn't the TEA Party been clamoring for fiscal responsibility?
If someone borrows $100 from you, would you you be happy if they paid you $50 because what every they used the money for depreciated in value?
For those of you who TOTALLY lack compassion for your neighbors, friends, or relatives, I really feel sorry for you. A large percentage of people bought their homes several years ago not knowing what was going to happen down the line. Apparently, many of you are crystal ball gazers and knew what was coming....amazing. I know many people who purchased their homes not knowing that they would be losing their jobs (the ones they'd had for many, many years and felt were stable), would be losing their healthcare benefits (or paying more), and using up their 401(k)'s to keep afloat. To blame people erroneously for "purchasing a home they could not afford" is ridiculous! No one knows the future...even most of you dimwits who have responded here! What in heck has happened to our society that we cannot have feelings for people....again, these are your neighbors, your relatives, and probably some of your friends too! No one knows the future until it happens!!
I know, for myself, our house was appraised for about $900,000 many years ago....we had a $625,000 loan with a 6.25% interest rate. The same house now is worth about $465,000 (maybe), and we were able to go to our loan servicer for a loan modification and they decided to refinance us at a new loan rate of 4.25% on the current balance (which is now under $600,000). It only saved us about $750/month, but it helped. We're still underwater, and even if we wanted to refinance, we could not. So, for those of you who think refinancing is so easy when you are underwater, you need to get your brain examined. NO bank is going to give you a loan for what you currently owe when your home is appraised at a lower value!! I mean, really, use your heads for something other than a place to put your ears!
In conclusion....again, NOT everyone bought a house they "could not afford." They bought a house for what they could afford at the time....not knowing the future. I don't think ANY of us can predict the future; if so, manybe you can tell me if I'm going to win the lottery????
Which will come back to bite the rest of us in one way or other.
11/24/2011 ....... Re attempted forclosure help......
Yes... let nothing be done and the forclosures play out until the housing market hit bottom, allowing investors to purchase these homes as cheap as chips, fix them up and rent them out to those who no longer own the homes.
Yes lets follow the Romney plan.....He said it last week.
That is the Romney plan for helping homeowners...make them homeless first, then let them live on the streets because the cost of rent has increased to where the amount of rent being charged and paid in some areas for an apartment is even higher than a mortgage payment on a house.
Question ....do you folks really want nothing to be done to stem the tide of forclosures/short sales? If so why?
Question... do you realize that the forclosures and short sales are dragging down your property value too?
Question.... is your house that you purchased with 20% down still worth what you paid for it or has the value fallen drastically?.
Question... do you still have any equity in your home (from the 20% down)?
Question.... do you believe the banks are actually serious about stemming the tide of forclosures?
Question... do you believe that the economy will improve if more people lose their jobs?
Question... will you be able to afford to pay your mortgage (or rent and utilities etc) if you should lose your job or the value of your 401Ks, IRAs, Savings etc continue to lose value?
Question... To those who are retired.... (a)if things do not change regarding the housing market and the continued loss of jobs .. will you or have you started to tap into the principal as opposed to being able to use just the dividends from your investments?
(b)How long do you think your investment/pension funds (principal) will last..... 10 years, 15 years? 5 years, 1 year?
Question.... what do you all believe that a Romney, Perry, Cain or a Backmann will do for you and the country? How will you be better off if one of those candidates become president? How will they help your financial state?
Question...Homeowner.... have you had an appraisal done on your home recently for assessment of present value?
You should have an appraisal done even if you are not selling... it can be eye opening.... LOL
It seems most of the people who are opposed to this don't understand it. A lot of people could take advantage of refinancing at a lower interest rate, but they don't qualify because their mortgage is upside down. These people with FHA loans already have the government guaranteeing a portion of their loan. That's what FHA and VA loans do, they guarantee a portion of the loan to make them more attractive for banks. This isn't a "bailout," it will simply allow people who are current on their loan to refinance at a lower rate even if their loan is upside down.
@Longhair -- If you loaned someone $100 at 11% for year, you would get back the $100 plus $11 as profit - total of $110. If the loan defaults you lose all the profit plus take a loss on the devalued property (lets say 25%). It the loan defaults you get back $75. Refinancing the loan helps the borrower repay the $100 but you get less profit. Refinancing that loan at 5% means you get back $105 instead of %111.
Would you rather prove a point and get back $75 (loss of $36) or would you rather refinance and get back $105 (loss of $6)?
The way the system is set up now - the banks can transfer a portion if not all the loss from foreclosure to the government. Foreclosure will allow the bank to get its money back but costs the government. To control cost to taxpayers, the government should be finding ways to refinance those underwater mortgages. Private profits - public risk.
Apparently the TEA Party would rather prove a point ...
How does it become the Governments responsibility to bail out any one person? People lose their jobs everyday, companies fail, markets change. If you don't see the writing on the wall, then shame on you! I have been saving my pennies for ever, I have enough savings to pay off my mortgage, forward planning. I do not want to live in a welfare state, The democrates want us to do just that. People need to work, not everyone can be a doctor, but they can become plummers, electricians, and other skilled labor. Stop the hand-outs and they'll applie for one or more of the 7.5 million open jobs in this country!
@ NERM:
Math is simple and since you don't know that the sum of $100 PLUS $11.00 is $111.00
I can't believe your other calculations. libs can't do MATH, that is how the country got in this mess!!
Any more of this spending madness and bailouts and we're all going to need government welfare.
But wait, if taxpayers can't pay then it's game over, hit the reset button and start from scratch.
A completely rightous program to help americans and their familys. ANYONE that does not think so would be truly be an idiot.
ciscoet,
How are you different from a first time home buyer with excellent credit who wants to put nothing down and wants to actually get a loan in excess of the value of the collateral (the house) they are offering up?
As you know, your house has a market value of $X while your mortgage is for some amount $Y which is greater than $X. Your lender would be engaging in wild real estate speculation to assume that the house is actually worth more than $X - something that hasn't worked out well for speculators in the past few years.
Of course your lender will take your monthly payments -- partially because they have no choice (a contract is a contract), partially because there is a slim chance that you will eventually pay off the mortgage rather than default, and partially because they have too many foreclosed houses right now. However, the fact is, that the lender now has a very high risk loan on their hands for which they would normally demand a high interest rate (way in excess of your current loan rate).
The main motivation your lender has to cut your interest rate is if they think it will substantially reduce the odds of you defaulting or significantly delays when you default -- and it probably doesn't. If they reduce your interest rate and you do default eventually and at about the same time you would have otherwise, they just gave up a bunch of interest between now and the time of the default. If you eventually pay off the loan, they were obviously better off keeping the interest rate high.
So, somehow, you need to convince your lender that you are unlikely to ever default at a lower interest rate but are likely to do so fairly soon without an interest rate reduction. That's a tough sell. The lender would have to predict the future - a risky task. The lender has no reason to believe your word or your underlying intentions or your ability to follow through on your word or intentions. Oddly, because you seem committed to make your payments (having done so on an underwater loan for some time), the lender has reason believe you will continue to do so even at your currently contracted interest rate (perhaps out of a sense of "duty", perhaps out of a fear of spoiling your credit rating).
As a lender, I'd probably make a business decision not to reduce your interest rate.
All the changes that need to be made can't be made in one bill, or one law, or one readjustment. They take time. And lots of back and forth. And lots of trial and error. No one knows EXACTLY what it is going to take to rebuild our housing market or this economy. So we need to do what we think is best and go from there. We are literally starting from the ground up. Unfortunately this mess didn't come with an instruction manual with a "Trouble Shooting" section.
And I would really like to know why in the world some people think its a good idea to encourage MORE people to let go of their homes? I think its a great idea (a small step yes, but a step in the right direction) to try and help even a small percentage of the people that cannot refinance their homes due to value. Any little bit helps. To encourage people to walk from their homes is just hurting the economy more. The banks won't need to be bailed out if people like that didn't keep sticking it to them because they think the banks "owe" them. If you truly can't afford your house, and there is no option for you, then absolutely, that is what foreclosure is for. But don't just walk away because times are a little tighter and that pretty car you want, or the fancy designer bag you "need" just won't fit into the budget if you pay your mortgage.
Do I like the idea of helping out the banks? Absolutely not. Do I think its necessary? Absolutely. Banks are becoming stricter and stricter about who they will lend to and under what circumstances. Which in a way, needed to happen, because 6 years ago, any Joe Shmoe could buy a house, any house. And thats not right. So in order to get the banks to help us, we need to help them.
And quit blaming just the banks for people being upside down. Did some of them just do it for the money? More than 90% of them. However, did the banks hold a gun to millions of peoples heads and MAKE them buy these houses they couldn't afford? I'm gonna assume probably not. People knew what they were doing, and if they didn't, they should have researched it more. You mean to tell me you are going to spend $300,000 on something and not have any real idea if its a smart move for you? Or if there could be a better option out there for you? Looks like banks weren't the only ones with $ in their eyes.
Plus, some of these people that bought these expensive houses COULD afford them. Did they know that within 2 years their salary would be cut by over 55%? Or they would lose their job completely? I'm gonna say no. Or they probably would not have bought the house.
You need to look at all the factors before you just start pointing fingers at banks, homeowners, Obama and anyone else you could blame for this. EVERYONE contributed to this mess.
But that doesn't matter now. The problem is here. And its getting worse by the day. Pointing fingers isn't going to help anything. We need a solution.
@AKRandy -- Yep, I was typing too quickly and sloppy with the proof read. My bad.
As I mentioned the TEA Party apparently only wishes to prove a point and pass the loss to the government. Government debt is okay as long as the money transfers to the financial services industry. Going to be interesting watching the 'investors' actually trying to work for a living ...
AKRandy- I can't believe you actually have the gall to type the drivel that you do on this forum.
First of all, you mention in post #2.18 that Dems are printing money and giving it to "their" unions. Actually, it is not going to unions, and if you want to argue over printing money, then please read up on Bush's 8 years (TARP, anyone?) and how our entire monetary system works.
The you made an off-hand remark about the "47% who do not pay taxes". Yet, if you bothered to read anything, you would know that that talking point has been debunked countless times on this forum. EVERYONE pays taxes in one form or another. If you make less than the poverty level rates, you do not have to pay FEDERAL taxes. Let's see if you will complain when you are told you must pay fed taxes on $25,000 a year income.
And then, in post #2.29 you lambast NERM for his mathmatical error. Yes "Randy", you are correct in that 100+11=111, not 110. It was a simple mistake. But for you to discredit his/her post based upon that one miscalculation only shows your true agenda. You are guilty of committing the logical fallacy of 'specific numeration'. If you don't know what this means, then get off the forum until you do. And while you're at it, study up on the other logical fallacies as well. It MAY help prevent you from looking more like an idiot.
Of course, I don't think you're an idiot, Randy. No, I think you're a troll, which is something altogether different. You may even be a paid troll, considering how much time you spend on this forum constantly spouting the same nonsense over and over.....
terriels - one of the reasons banks aren't lending is based on the spread between what it costs to make the housing loan and the amount that they can realize from making the loan at 4%. Another factor is the new rules placed on banks for the level of capitalization required to even make the loans, Call it the unintended consequences of the wall st reform act.
The fact that even the obama administration has a great deal of uncertainty about its effectiveness should be a warning to us all. The government can't fix the greed of the consumers who treated housing as a cash cow. All it has done so far is to kick the problem down the road. Some builders and banks had the right idea back in 2009/2010, bulldoze the homes and get them off the books.
"Eric: Republicans will not help? Who created the HARP program?"
well this proves the point about how TERRIBLE the republicans are right now...
HARP was created in 1961... you had to go back 50 YEARS to find something good to say about the republicans!... all the current republican potential candidates were not even adults when that happened... for example, bachmann we 5 years old when that happened.... i guess we now we know why she isn't a REAL republican... she was too young to experience one! :)
Thank's to you idiots, buying a home you couldn't afford. We're all losing our value. The banks should take all the loss, not we the taxpayers. No more bail-outs for anyone!
"A leading housing regulator on Monday announced changes to a government refinancing program that could help up to one million homeowners of the estimated 11 million whose homes are worth less than their mortgage."
Typical Obama Administration hype and rhetoric.
The original program was supposed to 'help 7 to 9 million homeowners that owed more than their house was worth'. Do you want to know how many home loans that owed more than 105% of the value of their home were modified? 5,400.
That's about one out of every 1,500 - after jumping through hoops. If a private company made that promise, they would be sued for fraud.
Obama's recent speech in front of La Raza telling his audience how he will bypass Congress to get the housing loan situation cleared up(???) and how he will also take care of the student loan problem (????) Then he states that he wished Pelosi were still in power, that way he could ramrod stuff through congress without having to go around congress like he's currently doing.(????)
http://youtu.be/5wD5Y88UWno
The government should pay those of us who paid cash for their homes during the housing boom, now worth much less, the difference $$ between what they paid and it's current value.
Why should only the people who financed get a "deal" based on a new lower value?
Come on Obama, reward us responsible folks some $$$ for NOT financing in the first place!
Willing.Sniper....I think what they are counting on is...if you sell your house at a loss you can write that loss off your taxes and well there is your cut.
How many times are the clueless idiots in Washington going to keep repeating the same failed policies? Insanity is repeating the same thing over and over expecting different results.
Hopeful American said:
They didn't do everything right if they bought houses they can't afford. The biggest purchase ofyour life and your going to gamble on the house being worth a huge amount more so you can re-fi in 5 or 7 years when the loan adjusts? If you can't afford the adjustment rate, you should get a fixed or a cheaper house. To buy a house assuming the value will go up a certain amount, or at all, is foolish at the least!
Let's see:
1. Bought a house I couldn't afford? NO
2. Took a gamble on house value improving? NO
3. Got a divorce and still able (although struggling) to make payments on a under water mortage: YES
"STUFF" happens in life. So cut the crap with the blanket statements like every case of a underwater mortage is due to foolishness!
A lot of good ideas should have been done sooner.
Unfortunately, we have a Republican-obstructed Congress that is willing to take down America in order to take down Obama.
mamashep,
We do know a few things though, although some are politically difficult to say.
One thing we know is that housing is still overvalued -- depending on location of course.
Nationally, just to return to recent historical norms, we probably need at least another 10 percent drop (see Case-Shiller housing index graph here: www.multpl.com/case-shiller-home-price-index-inflation-adjusted ).
More alarming is that the climb up to "recent historical norms" takes us back to a new level that was reached in the 1950's (and remained quite stable until the mid nineties when the climb to the peak in 2006 began). This was a time when people were less mobile and tended to work for the same company for decades (and were, therefore, less likely to want to rent for reasons of flexibility). It was also a time when the "American Dream" was to "own" a home and most everyone was raised with the notion that "real estate always goes up" (which, of course, was actually false for periods more than a few years as shown by the graph referenced above). Many who have lived through the last ten years are now quite skeptical of such claims -- including the generation currently entering the workforce. Thus, the reversion to mean may be expected to be closer to something earlier than the 1950's and could be 40% or more below the current market.
This reversion to rational pricing will be painful, but a necessary part of rebuilding. Attempts to manipulate the market are likely to make it ever more painful over a 20 year period than taking our medicine now.
@Willing.Sniper -- You do realize that the government is not 'giving' any money to borrowers? The government is providing lenders a guarantee for the underwater portion of the mortgage to encourage the lender to lower interest rates. The mortgage holder is still on the hook for the original loan amount - just at lowered interest. That is how refinancing works.
If you really feel badly about missing out - you could take out a mortgage on your house, too. Or are you saying boo hoo - didn't get your share of the bailout? Banks only qualify for bailouts, didn't you notice?
Did everyone miss the part where this refinancing plan is only available for people that have been paying their mortgage? This means they bought a home they COULD AFFORD, this is not about people who were irresponsible with their cash or thought favorably of their future and the shady promises they were told by brokers and lenders looking to rake in cash and bonuses. What is happening in reality is they single families are acting the way any corporation does. A home is an investment as well as a place to live. When a corporation makes an investment that does not produce a return, what they do is walk away with the loss and write it off on their taxes. So what is happening out in the world is when a family is possibly hundreds of thousands of dollars underwater, many of them are just choosing to walk away and call it a loss, take a hit on their credit and rent an apartment/home somewhere else. This is resulting in massive abandonment and entire neighborhoods are empty and at risk for crime and squatting and vandalism. Look, taxpayer money is getting spent no matter how you look at it, you can either choose to help prevent problems with tax money or you can spned it on imprisioning people, increasing criminal activity and hurting other's chances further in life by affecting their credit ratings that can affect their ability to find gainful employment. To keep these people paying their mortgage, the government and the banks are offering an incentive, stay in your home, pay a much lower interest rate in the hopes that in the future your home will get closer in value to what you paid for it. Also, they hope that the money they are saving in mortgage payments will allow them to have more spending cash to purchase goods and services, the things that help our economy.
It's a very complicated system, they are many many people at fault from the government trying to do good but in a foolish manner, to appraisers hiking valuations, bidding war frenzies by listing agents, to some greedy people at lenders trying to rake in as many fees as possible on new loans all while having no risk because they sell off the loan lickety split causing them to entice many people into loans that were not that great, like interest only loans, promises of future refinancing rates, favorable ARM rates, less than full disclosure on what the worst case scenario of monthly costs would be associated with home ownership. Many many people were assured that the price they were paying was no problem and were enticed and led to believe it was worth more to spend a little bit more on house than being cautious and spending less. It's blaming people for being conned and it's heartless and mean. Sure, there were a few foolish people who made bad decisions and are rightfully losing their homes and having their credit crushed, but that is not the majority of people.
Who are we going to be bailing out next, Vegas gamblers, credit card abusers, students in college. Too bad the people that own these homes have buyers remorse, but no one forced them to sign the contracts on them. Now deal with it, and stop expecting government to use good taxpayers money to bail your azzes out. If you can't afford the home, then you don't need it in the first place. Do as i did for a long time... RENT and save money until I had the cash to buy the home without a loan or owing on it.
People wanting to own homes and trying to live the American dream has become everyone elses nightmare.
@WhatsLegal
Not arguing with any of your facts.
I was just saying that its going to take trial and error to rebuild what is so horribly destroyed right now. And we don't know EXACTLY what it will take to fix that. So all these people bashing Obama for not trying or trying the wrong thing need to back off a little. Like I said, nothing is going to fix this overnight. And at this point, baby steps is all we can take.
unravelingofAmerica:
So what's your point? You are doing what you should be doing - paying your mortgage. So your underwater on the house - so what! Nobody guarantees anyone that their house will go up in value. It's a chance you take when buying the house. Tons of people are walking away, because how dare they be expected to live up to their contract and pay for what they chose to buy??!!
Didi-376564 said:
So just why is it you needed a loan modification if you bought a house you could afford with a fixed rate of 6.25%? It's great that you got a lower rate to save money, but if your original loan was 6.25%, then that should have been a payment you could afford. Unless of course you bought the house under an adjustable, and it has risen to 6.25%, which you should have then taken into account when you took an adjustable.
And yes, everyone that bought a house with an interest only or low interest that was going to adjust up at a certain year was buying a house they could not afford if that can't afford the payment now that the loan has adjusted up. Again, it doesn't matter what your house is worth. Buyers choose to buy a house for a certain amount in loan payments - period! Also, lenders don't owe people the opportunity to re-finance - they need to qualify.
And you're right - no one can predict the future, but, it is not the taxpayers responsibility to subsidize those unknowns. It's a part of life, and YOU have to make adjustments for what affects your personal life - not others.
Whatslegal,
I completely agree with your statement. I honestly wouldn't expect my lender to lower my rate. I would expect another lender to compete with my current one and offer me a loan at a lower rate.
dzaffina 2.15 Do you always believe the half truths (sometimes no truths) you read? Home ownership rates climbed steadily from 1994 until 2004; that's six years under Clinton, who started the ball rolling. Should Bush have done something about easy lending practices? Hey, he inherited them from Clinton.
@ Ol Doc 2.12 It's my impression that businesses are in business for profit. Don't like the idea? Go start a country somewhere that doesn't have people and human nature in it.
More government intervention into a private sector decision. Seems this level of intervention earlier (thanks to Barney Frank and others) is what put so many people into homes they may not have qualified for. Now the government wants to change the criteria for refinancing the home. Let's see, my investments aren't worth what I paid for them. Should the government step in to fix that as well?
But you were ok with the Wall Street bailouts.
We cant afford this program. We need to save that money for the upcoming FDIC bailout when that agency has to cover the trillions of dollars in bad derivatives that Bank of America just dumped on them.
We can't bailout main street when there are so many needy bankers out there.
I don't know about Danno but I wasn't ok with the Bush/Obama bank bailouts.... and I'm not ok with this plan either. Govt cannot fix this.
Gotta love Republicans that want to kick people while they are down.
Republicans = "yea ! let's have 500,000 more foreclosures".
Eric-913730
The comment "Republicans want to kick people while they are down" is an ignorant childish comment. I am a republican and regularly participate in philanthropic organizations, and strongly believe in helping my fellow man and those less fortunate. However, It is important for the citizens of this country to exhibit personal responsibility. I am sick and tired of everyone expecting some sort of government handout to help fix their problems. It will come at a cost that will only further weaken this country.
The hand-basket is loaded... let's proceed with America's trip to hell. The policies of the last 30 years have come back to drag this country into the toilet and politics will keep it there. We get what we deserve because this is the representation we voted for. We are our own worst nightmare.
Hell yes, I lost (Not any fault of anyone but me) some 30 Grand in the Market over last two years, maybe Obama and the Democrates can cut me a check?
daniel - if I was a liberal I would say wait your turn buddy, I am first in line for that bailout. lol!
I can appreciate that this program may offer a solution for homeowners that are good risk to save their homes from the next downturn. It is time that solutions are offered to secure those who have shown a willingness to keep their homes and have prioritized to save their homes...I would caution that these loans should only go to support the value of the home and not to take extra cash out. If the program is structured for this purpose then fine. Stop the earnest from going under and stop throwing offers at those who have already defaulted and are milking programs for all they are worth.
I agree txmom32. This will keep those who are still employed and making payments from going further under and possibly give them some relief in the form of lower payments. But it does not seem to help if they would want to make improvements or needed maintenance that in this economy would be difficult if not impossible to "save up" for, except by lowering the payments.
I just don't know how many people overall that this would help.
The program is likely to help between 500,000 and a million homeowners.
terriels...Thing is...this is a necessary measure for the earnest...It should not be a situation where they can borrow from equity or offer an option to borrow more than the value of the home for repairs or upgrades....that was part of the whole mess, people borrowing from their equity to make repairs and upgrades instead of planning ahead and saving for the cost of home ownership. These measures should be directed to support the homeowner to keep their homes with an interest rate that has been offered to those who refinance just to default again.
As for the Obama numbers of how many homes this will save....I wouldn't count on those in his administration to really have a viable figure. They seem willing to throw American $$$$ at anything before they know what they are really doing.
I see this as an incentive for the honest homeowners to get some breathing room and a way for them to ride out the rest of the painful Obama administration. Once he is out of office Corporate and Small business money will start to flow again, just not at the insane and reckless rate that our Federal Government is shoveling cash into the incinerator.
They we're using that home to buy cars, take fancy vacations, gamble you name it they used it. They get what they deserve! They're gonna have to raise taxes to cover all these bail-outs. We need a flat tax for everyone to pay even the poor, including those 8 million illegals working here. No more welfare give out strict food vouchers for emergency like rice, beans etc no more gourmet food. I've seen people in the grocery line, paying with food stamps eating 20 dollar steaks wtf.
Nikki...agreed there were some very unscrupulous borrowers when they used their homes as a piggy bank. They were certainly not smart enough to manage their own financial affairs when they were using equity to finance a lifestyle that they really could not afford....One can only hope these are not the households that this program will be available to. On the other hand there are many households in this country that have suffered loss in the value of their homes because of the greed and poor management skills of their neighbors. They can't sell their homes and move on or move up they are truly stuck through no fault of their own and they have continued to pay for their homes and will carry that burden because they are honest people who did everything right except move into a community of deadbeats who would allow the house to go back at the first hiccup of discontent.
I don't think they will need to raise taxes if this is done right, of course it's Obama so it probably will not be done right. If they discontinue offering all of the failed programs aimed at saving those who have already walked away once and get rid of the program to pay $3000 for a person to surrender their keys when they have already stopped paying for the home...the Government can probably make a better use of the money they already have at their disposal and will not need to budget for more. Again that is trusting a whole lot of common sense to this administration.
As for the austerity measure you have mentioned above...I agree. We are a Democracy and every citizen or resident should do their fair share to support this country. In comparison to third world countries we have a relatively small population of people who are either mentally or physically incapable of contribution to the greater good that would need to have some sort of social assistance to live a dignified life. We need to get the cheats off of the system so those who need help can receive help.
Now Obama wants to double down on the mess that started this whole economic mess, Carter's CRA which was expanded by Clinton. Obama, once again, is doing precisely the wrong thing to help our economy. I for one am tired of paying excessive taxes to fund these failed socialist programs.
What excessive taxes are you paying to support these programs that don't yet exist.
Under Obama NOBODY has seen their Federal taxes increase.
.... but he may still be paying excessive taxes.
Ron Paul has it right, "Federal Income Tax is an immoral theft." We should only be (flat) taxed equally for our national security and then excise taxed for those things we as individuals purchase and use. The Federal government has no claim on our productivity or our earnings! I no longer proscribe to our politics as usual sensibility; no more tyrannical spending. For heavens sake, the Pentagon, by far the biggest benefactor of our tax dollars, has openly admitted that it could not account for the money it's receiving. It all makes me want to shout that I'm mad as hell and I'm not going to take it any more; sadly knowing, it'll only serve to make me hoarse and over taxed.
John Bayner.....but the national debt has skyrocketed hasn't it????
I'll agree with that. It has skyrocketed because Bush liked to buy things that we couldn't afford.
Tax cuts
2 wars
Part D medicare.
Lost revenue from so many unemployed.
The main addition to the debt Obama was responsible for was the 787 Billion stimulus, which many economists say likely saved us from a deeper recession and more job losses.
In 2007 the money the Federal Gov't brought in was around 2.7 trillion.
In 2010 the Gov't only brought in 2.1 trillion.
The point is Washington spends too much money, period. As long as we keep fighting over who spends it BETTER we're missing the point. Have you noticed that the financial calamities of recent involve the gov't stepping in to ensure that the bankers keep making money i.e. preventing the default of payments going to the auto industry, housing, and next student loans. Who gets the interest? Who gets the votes? and Who gets the shaft? Democrats say "the rich are greedy"; Republicans say "the poor are lazy"; Meanwhile certain SOMEONES are laughing all the way to their dark cherrywood offices.
John Bayner is a moron. Bush's 2007/2008 stimulus was 787 billion and of that, less than 35% of it (approx 270 billion) had been spent. Obama takes office and the firs tthing he does is propose a NEW 1.1 TRILLION stimulus package on top of the 787, not even waiting to spend the rest of the 787 and see if it has an effect. His claim,,, approve the 1.1 trillion and unemployment will never go above 8%. National average is now close to 10%. The average across Bush's 8 years 5.9%.
FACT - in 2006 Conservatives wanted to place Fannie Mae and Freddie Mac under stricter regulation. Regulation that was blocked by Barny Frank and Chris Dodd, both of which took campaign contributions from Freddie and Fannie execs. Now Obama wants to bypass the exact regulations put into place to protect taxpayers from poor lending decisions to buy votes for his failing campaign.
Ptown super moron, I think you are confusing TARP, with the American investment and recovery act aka stimulus.
How do you feel now dip @!$%#.
John Bayner, One of the first things Obama did was raise federal taxes on tobacco products. To say that "under Obama NOBODY has seen their federal taxes raised" is completely false... BTW; I don't care to hear anything like "big deal it was only tobacco taxes", it is a tax plain and simple..
The banks should be forking over the money to fix the problem they created. Not the taxpayers.
Finally someone with some common sense.
The solution is for all banks to refinance current loans at the current balance and at the current interest rate! Then, only the banks would be losing money...the individual homeowner would lose equity, but they would NOT lose their homes and their payments were go down.
We applied for a loan modification about a year or so ago....in lieu of modifying our loan, Wells Fargo (yes, Wells Fargo, believe it or not) merely refinanced our current balance at the current interest rate...it saved us about $750/month, but that certainly helped. I believe they did this because we kept paying the higher payment during the entire year it took us to get them to do something. We could not have refinanced it ourselves because NO finance company is going to pay off your current loan at a higher rate than what the home is appraised at.
In the end, we got a lower payment, the bank sucked up our equity and a few dollars more, and all God's children are happy. We have our home, our payment (although still relatively high) is doable, and things are fine. I only hope our neighbors, relatives, and friends could have the same opportunity.
What are you going to do about THEM destroying the value of your home?
I just dont get the whole "The banks will lose money" thing. An interest deduction is not a loss it is only a reduction of future profits. For that matter the banks have been willingly eliminating future profits every time they foreclose on a home that could have been saved through a simple interest rate deduction. The real kicker is that if the foreclosed home was done through Fannie and Freddie the real losers are the American taxpayers, not the bank. If the bank could have saved the loan but foreclosed anyway and left the taxpayers with the bill, that is fraud. This also helped contribute to those who are underwater. Had they saved the mortgages that were in trouble due do income loss, we wouldnt be in such bad shape. The banks would be showing higher profits too for that matter.
Dont believe me? The math is simple. On a 100k loan at %8 the bank will earn nothing if they foreclose. If they drop the rate to %5 the bank will earn $5000 a year in interest. Quit listening to the political talking heads and do the math.
I voted for this guy and I can't wait until he's out of office. Unfortunately I'll probably have to vote for someone who will serve their financial backers as well but Obama has to go. Our two party system is corrupt to the core and there is no hope in sight. Get Money Out of Politics...it's past time for a revolution in this country.
Yes, I'd agree that is the root cause of our political problems. When you need hundreds of millions of dollars just to be a credible candidate, you know the system's broken. Limit advertising; that would cut down drastically the amount of money needed.
I think there's an even more fundamental problem than money. The people who wish to rule others are precisely the ones who should not be permitted to rule.
You can thank the SCOTUS for making money in politics even worse.
DarnThatDream, my thoughts exactly.
How is this going to help anything? My loan isn't through Freddie or Fannie and I don't know anyone who has a loan through them. Why can't they expand it to other financial organizations?!
Jmac--you'd be surprised. A lot more people qualify for this than they know, and it doesn't matter who you write your check to. For example, my loan is through a different institution, but I still qualify because somewhere, somehow, Fannie Mae shows up in the paperwork. It's worth checking out, at the very least.
what this means is that mortgages where the paper has been originated as/sold to Fannie or Freddie will be eligible for refinance even if the amount owed is greater than what guidelines would normally allow. Consumers do not have direct access to Fannie and Freddie. Banks lend based on Fannie/Freddie guidelines and then sell the loans (in bunches called traunches) to fannie and freddie in order to recoup funds and continue the lending cycle.
Most loans within the conforming loan size limits do go to fannie or freddie.
I am afraid that this action by the administration will have very little impact as the people that really need the help are more likley to be running lates that will prevent the program from being used.
Of course expanding the program into non agency and portfolio programs (loan by banks etc) would make it more effective. But the people that really need the hel are those who have been trying in ernst to keep up with payments but have been unable to stay ahead due to losses in income.
There are plenty of homeowners that took out alt a or sub-prime loans at higher rates and have been struggleing to stay on top of the loans. People for whom a significant drop in rate would free up money for breathing space and also drive money into the economy. That is where action if any needs to be targeted.Not to mention all of the Jumbo portfolio loans that cant be refinanced.
Reducing rates on these mortgages would free up money that would be spent on home improvement auto purchases or even in local businesses creating cash flow and hiring.
BS
Well said!
It is highly doubtful that by allowing 125% loan to values to facilitate refi's will help the economy or create jobs. As home values continue to fall up to 20% per annum by the time your refi is completed you will be under water again. So plan to stay in your home for the rest of your life.
I bought my home with the intention of staying here a long time, but for those whose jobs move them regularly, renting seems to be the only safe option.
By refinancing the home will still be underwater. But, by getting a lower rate the loan can be paid down faster to get back above water faster.
At my current rate it will take me 10 years to to get above water. If I can get a refinance I can have the entire loan paid off in 15 years at a lower rate if I make the same payment.
I have no trouble making my payments but the smart thing would be to pay it off at a lower rate if it is available.
OBVIOUSLY.
This is what got people in the hole the first time. Many advertisements on tv years ago. Get 125% of appraised value. No money down.
Geez, could you be a little ruder?
About time homeowners got a bail out. It wasnt their fault the government and the banks raised the value of their homes so high, and the interest rates beyond their ability to pay any more. When they signed on they could afford it.
They need to regulate the system, so that homeowners cant have that happen to them again. There wouldnt be a problem now, if municipalities couldnt just raise the value any time they like (for taxes). And banks couldnt just raise rates beyond a mortgage holders ability to pay. They should be obligated to refinance on terms a homeowner can handle.
Seriously? Do you even know how the housing market works? A home is only worth what someone is willing to pay for. Therefore, people set the market by their willingness to pay the prices (they had low rates so they were willing to pay more and it spiraled). The municipalities do not raise the value for tax purposes, when they do assessments they take into account the current market, they do not set the market.
A mortgage is a contract between a homebuyer and the bank. When you decide to purchase a home you as a buyer ask the bank to lend you the money you need and they agree to do it in exchange for a fee (the interest rate). Again it is a contract, with all the terms spelled out beforehand. If you can't afford the payment don't buy the house. If you don't want your rate to increase then get a fixed rate mortgage.
I am tired of everyone blaming the banks for their own mistakes. Time to take responsibilites for your own actions. Don't buy a home you can't afford.
The government is what drives values up the most, not the market. The housing market goes up steadily all over, at roughly 5-10% a year because assessors regularly up values, to garner more tax.
Does the market effect prices too, sure, in places with high demand, but its the government who are the real culprits. They drive the entire market up all over. Even in places with low demand. My house tripled in value, and it wasnt the market that did it. It was the tax man.
No they couldn't afford it. If all these homeowners had to put 20% down like I did, they couldn't have afforded the down payment on these over priced houses and they wouldn't have bought them. Therefore we wouldn't be in this situation.
20% down is the rule. No house over 2 times your yearly salary.
we've done this already. more government meddling will not bring an end to the mortgage mess.
I agree another laughing policy.
To effectively create a policy all primary resident home owners with a mortgage should be eligible for low interest refinanace PERIOD!
You don't think that assistance to those who ARE paying their debt would prevent more homes from going in to default? I have no intentions of walking away from my home and will pay my debt and maintain my credit for as long as I can. If I can refinance at a lower rate I will be able to continue paying my mortgage, will still pay the entire amount I owe and am not asking for something for free, and will not be contributing to a default loan. Win - win if you ask me.
When they keep those people in their homes it will continue to slow the decline of the housing market thereby slowing the bounce back from the bottom. By not allowing the market to move to realistic levels they are stealing an oportunity for non-homeowners who have been saving and waiting for a house at a reasonable cost that they can afford. Keeping prices artificially high with handouts steals other people's oportunity to buy an affordable home.
Loaning money because the government said so even if it is not a reasonable investment is what started this mess.
Since I did not buy a house should I be entitled to a financing of 125% of the amount of a home that I want to buy. That would be fair right?
I wonder if the politicians are getting a little nervous with the elections coming up, 3 years of nothing.
I appreciate the white house's compassion to home owners. Tell me something though... who is going to pay for these new initiatives? more borrowing from the chinese?
It is good to know there is a program out there for those of us who are NOT walking away from our homes for a quick fix, or easy solution. Am I an idiot, mmays-803128, because I bought a home that is now worth less than I paid for it? That I have kept my mortgage up to day by soon depleting my savings? I think the banks should have to take the blow for being greedy and "helping" people get in to loans and homes that they did NOT truly qualify for and could NOT truly afford. The ones that DID qualify and are keeping their mortgage up to date - perhaps we should be able to have refinance options? Listen, I am not asking for something for free. I simply want to keep my home, my credit and pay my debt. Whether I can refinance or not, I will continue to do pay my debt and do my best to maintain my credit for as long as I can. If I can get a better loan before my savings are depleted, I will. Can you honestly say that if you could get a better loan for your home in NC, that you would not take advantage of it?
I agree with TX Mom that the ones that are earnest and doing the right thing should get some help for a change. The ones that sit on their asses and take advantage of every free thing coming their way and who are not good risks, decide to walk away from their obligations because "everyone else is, so why not me too" - stop throwing good money after bad. Let the ones of us who are still in the game keep paying our debt, get this thing turned around.
I want to use this program just to get a lower rate, reduce the loan period, and get it paid off sooner. The bank will still get all the money owed to them, just at a lower rate. The same rate I would be able to get if my home wasn't underwater.
I will still be paying on the full amount of the loan, its not like they are reducing the principal to what the home is worth now.
Now I just have to see if BoA will refinance and what hoops have to be jumped through.
Exactly, good luck to you.
Yup if you got 8 to 10 thousand for closing ... Its just a bunch of BS to Refin your house to a lower interest rate
It's not if it will save me $150k over the life of the loan. It's not rocket science, just some simple math.
I pay plenty of taxes so if I can get a piece of the pie I will. Why sit around and complain about everyone else eating pie?
Tracy, you don't have to stick with BoA. When I refinianced a year ago, I asked my original lender and my current bank - both came back with same interest rates. I went from a 30 year mortgage to a 15 year, and from 7.4% to 4.25% interest, and my monthly payment went down. They quoted $2000 for closing costs, but ended up paying less than $300. It wasn't what I was expecting. Definitely worth checking out - at the worse, they can say no, but you might be pleasantly surprised.
I totally agree, I have all my payments on time, never skipped a payment and I have been unable to refinance my home because it is 130% LTV. So I am being punished for being a good payer and the ones that just stopped paying are getting all the help, while they have their late model car parked at the front door(they won't stop paying that because is will be taken away). I am a single parent, work extremely hard so I don't lose my house and can't get help. I hope this is implemented fast.
Not everyone that is behind in their mortgage Has a new car parked in the driveway. Most of them have lost thier jobs or or not making as much as when they purchase the house. Stop picking up lines from Fox News and really hear real people's stories before you comment. You could very well be in the same position.
Is there a copy of the proposal anywhere on the net?
Ok I read it, so what does the the"elimination of risk-based fees" mean? elimation of PMI? That would be pretty big. Too vague to make anything out of this. Not to mention you still would have to qualify for the loan through the Fannie/Freddie guidlines. This might help a few people, but just seems too little too late. Get a little more factual info in there.
ALL of these politicians are only concerned about discrediting their opponent and from the first Day they take office they start fighting to be reelected.
@terriels -
Actually I do have a better idea - how about everyone takes responsibility for their OWN freakin' bills, and stop expecting Uncle Sam to swoop in and save them from their irresponsible behavior? I work hard and I did everything right (i.e., didn't buy a house I couldn't afford) and guess what? The only way I'm getting 'screwed' is by the fact that my tax dollars keep going to people who did exactly the opposite. How about we start rewarding RESPONSIBLE behavior instead of subsidizing IRRESPONSIBILITY?
Its not home owners fault. Its the banks and the governments fault.
Homeowners have no control over housing values, or interest rate. They ALL qualified and could pay just fine when they bought. It was others manipulating the market, that caused this.
If you get laid off tomorrow or next week and can't find a new job within a few months and the job you do get pays half of what you make now - how long will it take for you to be unable to pay your mortgage?
Athough there are some people that just made a bad or risky decision working the market as it was
with no income check etc. Then why do we bailout banks and etc. Wrong! we should be working with the correct people whom make there payment and revalue and refinance primary residence home owners for there(banks, governing reg, etc) failures! Bad business and ethics but not reward them with a bailout.
We all need to have empathy for struggling people. If you lose your job through no fault of your own, get reemployed and take a significant pay cut, how are you expected to pay all your bills on time every month. We need help now. We can't wait for the "Republicants" anymore.
I hope that those who drove up housing values, without thinking of the consequences, learned a lesson from this. Hopefully something is done, so they cant do it again.
As long as people are trying to manipulate for their own benefit, there will be problems. And thats exactly why this housing bubble occured.
The government needs to keep its nose out of the private sector. (The government will just screw everything up AGAIN)
Sounds to me like Obama has nationalizing the banking system on his mind...
If at first you can't get one give away to buy votes, try, try again. This time he is trying to kiss up to those that got screwed because all the bad mortage handouts raised to price of houses and when it crashed some got caught under water. However, I fail to believe any of this money will really go to the folks who deserve it.
And it does nothing to help those who have either done the right thing and put down 20% on thier house and/or owned it for some time or put more money into it and still don't owe more than it is worth but are stuck losing a lot of money if they have to sell now, through no fault of their own. Must be he considers these among the "rich" that need to pay more.
That is the way of the democrats.
This is your typical democrat. Here is another one.
Today on my way to lunch I passed a homeless guy with a sign that read 'Vote Obama, I need the money.' I laughed.
Once in the restaurant my server had on a 'Obama 08' tie, again I laughed as he had given away his political preference--just imagine the coincidence.
When the bill came I decided not to tip the server and explained to him that I was exploring the Obama redistribution of wealth concept. He stood there in disbelief while I told him that I was going to redistribute his tip to someone who I deemed more in need--the homeless guy outside. The server angrily stormed from my sight.
I went outside, gave the homeless guy $10 and told him to thank the server inside as I've decided he could use the money more. The homeless guy was grateful.
At the end of my rather unscientific redistribution experiment I realized the homeless guy was grateful for the money he did not earn, but the waiter was pretty angry that I gave away the money he did earn even though the actual recipient deserved money more.
I guess redistribution of wealth is an easier thing to swallow in concept than in practical application
the negative comments on here are no surprise...blaming one person? He does not work alone,,CONGRESS is the MAJORITY that votes not Obama..anyways..im a realtor/investor affected by all of this...As I said from the beginning of the housing crunch..it would have been less of an impact..if the lenders would have just cut the people a break(temporarily) on the interest and just allowed them to pay more toward principal...think about it..a mortgage at 1400 is divided into principal and interest,,out of 1400 guess how much goes towards principal...$200 MAX. everything else is taxes ,insurance and interest,..when things were economically good..it wasnt an issue for the long run,,but now..many have suffered wage loss..realtors, lenders, and numerous others..so the interest should drop for the time being..that way people are still paying the loans and banks are still making some money..I would say...to decrease a mortgage to market rent value at say 1000 a month..is a 400 decrease..thats 4800 a year..big deal,,isnt that far less then losing 10s of thousands to foreclosure? Do the math ..it would not have gotten this deep if they did this in the first place..but as usual,,they want a quick fix..there isnt one..dont blame anything but the economy and greedy . A BAIL OUT wasnt why we invested in the american dream.
If you are keeping you mortgage current by using your savings......you bought more house than you should have. I don't feel sorry for someone that bought big and then used their house like an ATM. If you thought the housing market was going to keep making almost double digit increases, you were a fool. 2 to 3 % is average not 9 to 10. If you made a bad investement, your fault. If the bank made a bad loan, their fault. Where does it say anyone is ENTITLED to a big home and the government will come to your asistance because you were greedy or dumb in YOUR decision making. Should I expect the government to make up losses in my stocks or mutual funds because I made a bad choice. I only wish.
Or is it possible that using savings to pay for a mortgage is due to a layoff? Possibly due to being without work for several months? If you get laid off tomorrow - how long will it take for you to have to come out of savings to pay for your mortgage? Do you know how many people have lost their jobs and just simply "walk away" because everyone else is? They should not be allowed to have a mortgage. Is it possible that people buy a HOME not a house, that financial situations change due to death or divorce?
That exactly the situation I'm in. My business is in construction. I used to employ 4 people. Now just me. I'm very conservative financially. I bought in 2003 with 4.25 fixed 15 year mortgage. I made double principal payments, up until 2008, whenever possible. I managed to pay off 60% so far, so even though I've lost a third in value since buying, I still have accumulated equity. But I've pissed through my savings and IRAs since the housing collapse just getting by. So this program my help me refinance and get me a lower payment, Comparable to a 2 Bedroom apt. in my area. When prices were rising at a ridiculous pace, I did realize there would be an adjustment, I just thought the cycle would be like previous cycles like in the early 90's.
These programs are good for everyone who owns a house. If your neighbors house goes into forclousure it will affect your value. Since house construction is a huge part of the economy any measure to stop the bleeding is good. Try to see the big picture. People you don't live in a bubble. What happens to your neighbors is going to affect you. A rising tide raises all ships. Or crawl back in your bunker, with your 'me against the world' attitude. I hope the sector you make your living in is secure. I'm ashamed to admit I used to have your smug and arrogant attitude until it happened to me.
"Have compassion for all beings, rich and poor alike; each has their suffering. Some suffer too much, others too little." - Budda
But we do live in a bubble. All of us! Think of all the money the gov't gives or gurantees. Think of those industries. Now think of the diligence that is invested into something given vs. something earned. We live in an economy ready to pop. God Bless the United Serfdom of America when it does.
@ Who Cares --In this case the gov't gave people money to bet on the growth of an industry. The sophisticated investors reacted by spreading the risk and hedging their bets. The people that believed in the version of the American Dream that their politicians sold them are now on the hook or on the street. This tells me that the guys on wall street are ten times smarter than our politicians; but in the end look who is sitting pretty on the chesterfield couch smoking illegal cuban cigars, both of them. They are not immune however we vote for them everyday with our fast depriciating dollars and our dimwitted politics.
Its funny how some fail to see the big picture,,homeowners are the smaller fish here,,,..HELLO havent u heard..AMERICA is in debt,,not just homeowners..how many of you are debt free? hardly nobody...but thats not the problem here...the goverment has taken the focus off of themselves and once again , society is the victim...lets get real..CREDIT is what is keeping our country in DEBT..the problem is much bigger than US..so lets stop pointing fingers,,especially if your own hands aren't clean..quick fixes should be our motto in USA...we dont have the money to loan u..but we will borrow it from CHINA and get more in debt..how can we FIX that fact?