Rescue Includes Steps to Help Borrowers Keep Homes

[Mesteryo]

Source: WSJ

The bailout package includes more aggressive steps to help troubled borrowers keep their homes by requiring the government to do more to reduce loan balances and interest rates.

The bill calls on the government, as the owner of mortgages, mortgage-backed securities and other assets backed by real estate, "to implement a plan that seeks to maximize assistance to homeowners and use its authority to encourage the servicers of underlying mortgages, and considering net present value to the taxpayer, to take advantage of...available programs to minimize foreclosures."

Such measures could reduce monthly loan payments for homeowners and, in theory, increase the likelihood that borrowers keep up mortgage payments. It could also slow down the growing number of foreclosures.

The new requirements could represent a significant departure in the way the government has dealt with troubled borrowers in the past.

Read more: http://online.wsj.com/article/SB122265697254684627.html?mod=article-outset-box

[snappyturtle]

1. By the time the gov't. gets around to implementing a program, the times will be

better or worse, either one of which will play into another round of lame execuses to the public. I don't trust them. Can ya' tell? If they want to do something and do something now, re-write at a low fixed rate for thirty years. If the home owner can't handle the payment, unfortunately they will lose their home. As I see it, implementing a program is going to involve appraisals and lots of haggleing. Yes, just base it on the sale price of the original mortgage. It may not be worth that now but by doing that 1) the government would be making a little and 2)the adjustment of the original monthly payment should be enough to satisfy the home buyer. After all the buyer contracted to buy the home at the original sale cost. May not seem fair but lots of us are losing on the value end of our homes versus our mortgage payments. This would be easier to handle, more squirm proof from the gov't. and something would be getting done. The only time the wheels of gov't moves fast is when it wants something.

The fact that this part of the bill has few specifics makes me dubious of the extent to which the gov't is really on mainstreet's side.

[pattmarty]

2. NO FUCKING BAILOUT!!!!!!!!!!

[madrchsod]

3. Oct 1,2008 hud starts a new program to help homeowners

this program is not connected to this "bail out".

[whistle]

4. Is that what rePukes voted against?

[Carni]

5. What about those who already lost their homes?

I have asked this before...what about the thousands of people who have already lost their homes?

I guess they are to blame and get nothing but the folks now who are under water get bailed out?

I am not wishing foreclosure on anyone, but the foreclosures that I see in the papers NOW vs the ones I was seeing a year ago are for much higher amounts of $$$ Now the balances owed listed are 300 and 400 thou where as they use to be for more modest sums.

It looks to me like the little guys already lost everything when this crap started a year and a half ago, or whenever but of course they were ignored.

[slackmaster]

6. There is no "fair" way to undo a foreclosure

By the time it's all over, usually someone else has bought the house in good faith.

[Javaman]

12. The majority of the people foreclosing now are in the prime lending

category.

The subprimes, although there are many still out there are not nearly as numerous as they were in the last few years.

it's the prime borrowers that are taking the hit now.

so yes, the poor got screwed.

I stated 2 years ago that we should put an immediate freeze on the adjustable rates for all subprime borrowers. Back then I got shouted down on here. Now, the horse is out of the barn and the barn has been destroyed by a hurricane.

there is no fixing the subprime issue now. Way to much water under the bridge at this point.

[Carni]

16. I wish someone had adopted your plan 2 years ago

This issue makes me SICK--REALLY SICK.

I have been reading up on CDO's and CDS's and WTF?

I don't know whether to be more appalled by the fact that this activity has been going on in a greedy frenzied unregulated fashion by these crooks, or if I am more appalled because people like me are typically so out of the loop, that we didn't even realize it was taking place.

What is also scary is I been sharing some of the boring (to the average person) financial material that I have been reading with friends and they don't even have enough patience to try to read it.

The *smartest guys in the room* may have structured this heist, but I'll tell you...people like yours truly NEED to start getting on the ball and educating themselves about exactly what is going on in our financial system.

Knowledge is power--if they can't spin circles around us with verbiage we don't understand then they cannot continue to shaft us like this.

Putting my soap box away--but God does this piss me off!

[superconnected]

7. Oh look, they've revived the dream that it would help homeowners - so that the average joe will buy

into supporting this again. How odd, who knew it was re-written so faaaast.

Oh wait, it wasn't re-written yet. It's actually the same bill that doesn't help homeowners the way we think. Instead it helps them by having stuffed up banks that can make loans.

this downing the interest of existing loans etc, is something not seen in the bill at all so apparently that really is part of the "effort" meaning only talk and not likely to be there.

[bhikkhu]

8. "Encourages" is the word that sticks out

Didn't we already get sold a similar bill of goods? A little while back there was a big bill passed to similarly "encourage" banks to review distressed home loans and apply some credit or other allowing people to renegotiate loans....I don't quite remember, but it was supposed to save the day for millions of homeowners.

[WorseBeforeBetter]

9. 6% FIXED for 30 years, like the non-gamblers.

And screw the reduced loan balances. Homebuyers agreed to these fucking terms and if they can't meet them, tough. Let them lose their homes. Stupidity/greed/gullibility should not be rewarded.

[Spangle]

11. Might as well drop the loan amount

If the bank gets stuck with it, the price will have to drop to move it anyway. It would save everyone time and money if the bank does a re-fi on a lower loan amounts.

Banks are even agreeing to 'short sells.'

Since I live in an area with a HIGH forclosure rate, I rather have folks IN those homes, doing the up keep, then letting them set there and rot. Not mowing the lawns, etc... Bringing downt he value of my home even more. Making it impossiable to sell homes in this area.. starting to look dumppy by the vacancys. And with so many homes on the market, if I had to sell and move... I couldn't.. not will all the homes on the market.

[Lance_Boyle]

13. I only partially disagree

I'd love to see homeowners in foreclosure allowed to stay in "their" homes as renters, but in no way should they be permitted to hold an equity stake in that house anymore. This would bring in money to the lenders (now landlords), and would allow those who mismanaged their finances to the point of being foreclosed on to remain in the houses in which they live, but would not reward them by allowing them to profit off the bailout with an ownership stake in the bank's house.

[Peace Patriot]

14. You and Herbert Hoover! That is the fascist view--punish the poor, never let them

get ahead, let them pour their pittance wages down the drain, with the rich all taking pieces of it as it swirls away!

And it is a GREAT BIG MISTAKE.

Why? Because that renter is NOT BUYING A CAR, NOT BUYING A COMPUTER, NOT BUYING NEW CLOTHES, and has LESS INCENTIVE to keep up the building and the grounds, leading to falling home values all around.

What FDR did was to make it possible for the poor to buy homes again, and to achieve some equity, and to own something, and to have spending money, and to feel pride and self-respect again.

You can't jumpstart the economy by punishing the poor. You can't! It's been tried, and it was a colossal failure. You've got to start by having mercy on the poor, because that is the best economics!

[Mesteryo]

15. but then again..

I've seen many people in my area who bought these new $300,000 houses they know they can't afford only to not pay their monthly payment. You can't just ignore their responsibility and assume it's all poor unfortunate souls.

These are people who take total advantage of cheap credit and live way beyond their means. They aren't poor, they're middle class like myself but spend like millionaires. They're not going to accept just what FDR gave.

[SahaleArm]

18. Please - the poor have already lost their homes in the subprime mess

Now it's the high-value exurbs that's taking the hit (Alt-A & Prime). Yeah the folks taking out HELOC's for cars, boats, and vacations. Politicians only take action when these folks start losing their homes. If they cared about the working class they could have nipped subprime in the bud by killing seller financed down payments, enforcing stricter lending standards, and preventing usury.

[yoodle]

10. I hope this part makes it into whatever gets passed

We really need this in this country

[Myrina]

17. Why are we GIVING them money to LOAN BACK TO US at a profit?

How stupid to they think we really are? /rhetorical question



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