Frank Says Obama to Steer Funds to Foreclosure Relief

[Pirate Smile]

Source: Bloomberg

Feb. 8 (Bloomberg) -- House Financial Services Committee Chairman Barney Frank said President Barack Obama will steer “substantial” funds to stem foreclosures as the administration prepares to unveil its plan for stabilizing the economy.

“A major part of what you’re going to see from the Obama administration is an effort to put substantial money into reducing foreclosures,” Frank, a Massachusetts Democrat, said today on NBC’s “Meet the Press.”

The Obama administration has pledged to spend from $50 billion to $100 billion on foreclosure relief as part of the second installment of the $700 billion Troubled Asset Relief Program. Treasury Secretary Timothy Geithner is scheduled to release the administration’s plan in a speech Feb. 10.

Frank and other congressional leaders have faulted the Bush administration’s management of the first half of the bank-rescue funds, saying banks receiving taxpayer funds should have been required to lend more and modify troubled mortgages. They have called for new limits on banks that receive additional government aid.

“The president’s made clear that he’s very committed” to preventing foreclosures, Larry Summers, director of the White House’s National Economic Council, said today on ABC’s “This Week.” “I expect that it will be $50 billion or more that will be directed at providing support for the housing sector of our economy.”



Read more: http://news.yahoo.com/s/bloomberg/20090208/pl_bloomberg/aghgs66msuqw_1

[jwirr]

1. Almost every state has a housing authority. If the gov bought up

these houses and turned them over to that department and redid the mortgages or resold them that would at least go directly to the problem. Unfortunately many of those mcmansions are too big to be practical - maybe multi-housing?

[MannyGoldstein]

2. $50 Billion To Stop Trillions In Losses?

That'll be a nifty trick, if they can pull it off.

[Gregorian]

3. I think this is the basic problem. How do we devalue and keep our economy?

Housing prices are insane. And people don't have cash. It seems that no amount of bailout money can put a dent in something that is literally hundreds of trillions of dollars in size.

I see two problems. Over valuation of housing (which I believe is population driven), and not enough savings. But this isn't news.

Where does it go? Bailout after bailout? Can we slowly deflate home values? Can we do all of this while keeping an economy alive?

It looks ugly no matter how I view it.

My guess is by printing shitloads of dollars they'll devalue everything, and inflation will soar. But I'm just an idiot who hangs out on the internets.

[guruoo]

5. At the least, it might allow borrowers enough space to catch up on payments

[chelsea0011]

4. Weren't the bank and investment firm bailouts suppose to solve the mortgage problems?

[debbierlus]

6. Why not just lower EVERYONES interest rates -

5% cap. That would pump billions into the economy in spending.

[doodadem]

8. What makes you think that?

Our property went into foreclosure a few months ago. We were finally able to pull it back from the brink by Wells Fargo lowering our interest rate from 6% to 4.5%, and they tacked all of these penalities, fees, atty's fees on the end of it. It only lowered our payment from $2K a month, down to $1,500.

Problem is--MY HUSBAND IS STILL OUT OF A JOB! My business is still really slow in this economy. We've had no health insurance since it left with his job. We just cashed in his little 401K, and hope to stay afloat long enough for things to turn around.

Doesn't really give us more money to spend. And tax cuts don't help a bit--especially when any kind of rebate will go straight to the IRS because we're on a payment plan with them. We never even got to smell the last one.

This is reality for a lot of people.

[Oregone]

9. Low interest/low closing cost loans NOW!

Why not direct to consumer loans? The government would make a fortunate after 30 years

[Betty]

16. Amen to that

because I am self employed, not one bank I talked to was willing to drop my rate to 5%. I pay 7% because I don't make enough to qualify to pay LESS.

[bluesmail]

7. #1 and #6 are very good ideas. I wonder if the Obama Team

has mulled them over and if they were rejected, what the reasons are.

[MrPerson]

10. Pass the Bankruptcy Modification of Mortgages

And forget any other foreclosure relief. The banks aren't modifying loan like you think they are.

[Baby Snooks]

11. Wells Fargo is doing just fine...

"The events are financed by bank profits, and not from the government, he said."

http://www.bloomberg.com/apps/news?pid=20601087&sid=a8ClsLgXi4e0&refer=worldwide

That is John Stumpf. The CEO of Wells Fargo. Defending the honoring of "top employees."

If the banks are making a profit, why are we giving them billions of dollars to keep them from collapsing?

All eyes turn to Congress.

Whatever money this latest fool gives them will be used to help keep the rich from losing their homes.

Sorry but Obama is a fool. Just ask John Stumpf.

[Triana]

12. "Frank, a Massachusetts Democrat" - ENOUGH with the pretentious labelling already. n/t

[SoCalDem]

13. "...xxxxxx, is gonna, do xxxxxx..." is part of our "problem"

Our legislators need to learn how to STFU..

We have a LOT of blabbermouths who seem to be compelled to "leak" stuff to the press, whenever THEY are getting a little heat from the press about things they are uncomfortable talking about..

Now every right winger on earth and every presstitute will be in high gear about questioning and researching this "maybe-maybe-not" proposal..

If PBO had planned to do this, why steal his thunder, by outing it before he's ready to tell us himself..and if he decided that it would not work, he will not be accused of "hating poor people" because he did not do what Barney SAID he was going to do..:(

[PSPS]

14. What is "foreclosure relief?"

First, there are over $500 billion worth of toxic mortgages (NINJA, option ARM's liar's loans etc.) out there, and the majority of these will go into foreclosure when they recast through 2010. Each and every one of these needs to go into foreclosure if the buyer can't afford the payments. Lowering interest rates won't cut it as the house was far more than the person can afford anyway. The only way these people bought these houses was by taking a no-doc liar's loan, and their $40K/year income won't be enough to make the payment on that $750K house even if it had a zero interest rate.

Property prices are so high now because there was too much money chasing the houses. Easy money, courtesy of lax lending standards and the people who were more than willing to lie about their income to get that overpriced house, thinking they could "flip" it at a profit before the loan recast. Sorry, your gamble didn't pay off. You should have known better.

I don't wany my tax money buying people's houses for them. These people should be renting.

[thecrow]

17. AMEN TO THAT.....................eom

[Not the Only One]

18. I don't mind helping out people who got some bad luck, but not the willfully ignorant

I have made all kinds of decisions that restricted my immediate happiness over the years. If someone told me I could get a mortgage for a McMansion, I'd have declined it because I'd have known I shouldn't get such a mortgage that was out of my true price range. Same with vacations I didn't take, cars I didn't buy, etc.

I will be so mad if the government just pays off these mortgages. Pay mine off, too, then-- and let me buy a 4 bathroom home first.

[yurbud]

15. why not just force banks to renegotiate, which wouldn't cost taxpayers a dime?

[Romulox]

19. Homeowner relief belongs in the STIMULUS bill, not the TARP.

Sounds like a shell game to me.