Obama administration to order lenders to cut mortgage payments for jobless

[jefferson_dem]

Obama administration to order lenders to cut mortgage payments for jobless

By Renae Merle and Dina Elboghdady
Washington Post Staff Writers
Thursday, March 25, 2010; 6:01 PM

The Obama administration plans to overhaul how it's tackling the foreclosure crisis, in part by requiring lenders to temporarily slash or eliminate monthly mortgage payments for many borrowers who are unemployed, senior officials said Thursday.

Banks and other lenders would have to reduce the payments to no more than 31 percent of a borrower's income, which would typically be their unemployment insurance, for up to six months. In some cases, administration officials said, a lender could allow a borrower to make no payments at all.

The new push, which the White House is scheduled to announce Friday, takes direct aim at the major cause of the current wave of foreclosures: the spike in unemployment. While the initial mortgage crisis that erupted three years ago resulted from millions of risky home loans that went bad, more recent defaults reflect the country's economic downturn and the inability of jobless borrowers to keep paying.

The administration's newest push also seeks to more aggressively help borrowers who owe more on their mortgages than their properties are worth, by encouraging lenders to cut the loan balances of millions of these distressed homeowners and possibly refinance into loans backed by the Federal Housing Administration. The problem of so-called "underwater" borrowers has bedeviled earlier administration efforts to address the mortgage crisis as home prices plunged.

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http://www.washingtonpost.com/wp-dyn/content/article/2010/03/25/AR2010032502426.html

[yellerpup]

1. It will be interesting to see how many Republicans need this relief.

I wonder if they'll say NO to it. :sarcasm:

[DCBob]

2. Socialism!!!!

but its good stuff.

[tridim]

3. Thank you Mr. President.

This hits close to home, no pun intended.

[phleshdef]

4. I'm sure someone will find a way to spin this into another supposed corporatist plot.

[impik]

12. SELLOUT!!!!!!!

Oh wait...

[denimgirly]

5. Big Banks own Congress so i doubt a President can change the narraitve much...

I'm sure at best there will be a very watered-down give away to get the slight hooray but until campaign finance reform happens talk like this is just politican pandering.

[Kurt_and_Hunter]

6. Or What? What a weird article...

It says that banks will be "ordered" and "required" to do x, y and z.

Okay. Or what?

By what mechanism are they ordered or required?

The article doesn't seem to say. After the first few forceful paragraphs there is a lot of "encouraged" and "incentives" but I didn't see any method of compulsion.

No knocking the program... whatever it is. The journalism doesn't tell us what the program even is to knock or not knock.

Does anyone know where the authority for such orders comes from?

Thanks.

[FrenchieCat]

7. Sounds like legislation to be proposed to me!

that will be "requiring lenders to temporarily slash or eliminate monthly mortgage payments for many borrowers who are unemployed" as stated in the article.

If banks don't adhere to law, I would presume they would be prosecuted. That would be the logical course of action if one breaks a law.

I believe the article is meant to send the signal to congress that this is coming to them to pass. I would imagine it would be good to let the general public know that this is coming, so for once since the election, instead of sitting on our asses waiting for people to do stuff, we can start working on congress, letting them know we know this law is there for them to pass.

Of course I could be completely wrong, and the could just be a trick meant to fool us while Barack Obama gives his corporatist masters all of the rest of our loot! :sarcasm:

[Bluenorthwest]

8. They need to mandate home purchase for all

The people who refuse to join the pool are making the market lag, and preventing the others from their deserved equity gains.

[FrenchieCat]

9. Well of course! They need to do everything, and they need to do it now!

because the day that you will actually compliment this administration on anything they propose,
will be when pigs fly eating BLT sandwiches while wearing bikini underpants in a snowstorm. :eyes:

[Bluenorthwest]

13. Of course, I'm making a play on a joke made by Obama

Back when he was very opposed to mandates, and Clinton was for them.
The President is opposed to equal rights for my family, and you know, I don't find much need to go out of my way to compliment those who oppose my right to life, liberty and the pursuit of happiness in the name of their faith. Why should I? Instead, I make jokes, I point out the hilarious hypocrisy and inconsistency of the anti equality voices in this culture.

[Bluenorthwest]

15. I came back to add a compliment to you

Because while it is my duty to rag on anyone in power who is not yet on my side, I can freely compliment you for your very excellent work calling out media crapola around here, and giving people the means to respond to the various 'journalists' responsible. That is an important thing, and you do it well, and with your accustomed great gusto. So there is a compliment, if not to the Beltway, at least to you. It is a service you do. And I mean that.
So there you go. It is not personal. It is politics. Peace.

[FrenchieCat]

20. I appreciate the compliment!

:hi:

[boppers]

16. Well played.

Those who don't buy homes can pay a tax to make up for those who do!

[prolesunited]

10. This would really, really help me

I'm hanging by a thread here and I have less than $50,000 left on my mortgage. I could probably dump it quick to avoid foreclosure, but there are so many houses on my block for sale right now. It's just a working class block of starter homes built in the '50s and many neighbors are feeling the pain right now. It's not just the people in McMansions.

[hayu_lol]

11. How about doing the same for the...

credit card companies, particularly the BIG FOUR. Those who spent bailout funds on imprudent bonuses for executives, held fancy parties, and bought out their competition.

A few months of relief could help those who are unemployed.

[Thrill]

14. Obama Meet Re-Election

If he does this, it might lock re-election up for him

[and-justice-for-all]

17. Thank You from this unemployed homeowner!!!

:applause:

[optimator]

18. no help to renters

renters must be subhuman or something since they get no help at all...
maybe it will "trickle down" to them.

[FrenchieCat]

21. Renters should talk to their landlords and request a rent reduction.....

The reason why he is doing this is because he knows
that banks can afford it now....they've been making money,
so they can help. A landlord is not the same thing.

Pres. Obama can't be Santa Claus. Jeeze!

[TTUBatfan2008]

19. Now is the time...

For big time populist legislation that even the Rethugs can't argue against. Get a shovel-ready jobs bill going along the lines of what FDR did. Implement some harsh restrictions on Wall Street.