President Bush drops opposition to housing bill

[car67]

This bill if passed will surely throw a monkey wrench into the home ownership market and bankrupty casualties......

http://news.yahoo.com/s/ap/20080723/ap_on_go_pr_wh/congress_housing

[AngelinaCatHub]

OK, here is where BMRiggs and I concur. All they have to do is print more money and Walla, it’s fixed. I sure wish I had that pull when I got into trouble. Nobody to bail me out. ‘Hub

[bmrigs]

Like George Carlin said: Its a big country club and you and I are not in it. They help each other out. Bearn Sterns, Fannie Mae, etc. The big boys never have to worry about risky investments because they know the govt. will bail them out and the taxpayer is the one who will pay for it.

[silvercert]

so whatdoes this mean for those facing foreclosure? Anyone know how this is gonna work?

[JRScott]

Based on comments by Treasury Secretary Paulson this won't help anyone who's already in foreclosure or will shortly be in it. So I'm not sure it will help silver. I'm afraid it'll go to the big boys like farm subsidies do and leave out the truly needy.

[car67]

The way it reads its optional for your originating mortgage to sell to the Gov backed mortgage for a reduced payoff to avoid a foreclosure? The key word here is optional and you got to wonder how many mortgage companies will optionally take a cut and run?

[car67]

Increase the Federal Housing Administration's role. The FHA could insure up to $300 billion in new 30-year fixed rate mortgages for at-risk borrowers in owner-occupied homes if their lenders agree to write down their loan balances to 90% of the current appraised value of their homes.

Lenders would also agree to pay upfront fees to the FHA equal to 3% of a home's appraised value. Borrowers must agree to pay an annual premium to the FHA equal to 1.5% of their new loan balance and they must also agree to share with the government any profit they realize from selling or refinancing their home.

The cost of the new FHA program - which would begin on Oct. 1 and be in place for just a few years - would be funded by fees from Fannie and Freddie.

[Stilltheone]

Interesting...

I had read about this awhile back, but this new story increases my curiousity.

So, who will this program help? People that are upside down in their homes?

We are currently upside down in our home...owe $260K, worth maybe $240K (at the most)

If this proposal goes through, at 90%, we could go down to $216K...hmm..interesting.

Thanks for posting this!

[AngelinaCatHub]

Like George Carlin said: Its a big country club and you and I are not in it. They help each other out. Bearn Sterns, Fannie Mae, etc. The big boys never have to worry about risky investments because they know the govt. will bail them out and the taxpayer is the one who will pay for it.

[bmrigs]

You trust nobody in government. The whole system is defunct and voting isnt going to change the way things are managed in D.C. Speaking about Rome I like what this author said about Democracy. Keep in mind our govt is suppose to be a Republic but it has morphed into a democracy which is an undesirable form of government.

A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years. These nations have progressed through this sequence: From bondage to spiritual faith; From spiritual faith to great courage; From courage to liberty; From liberty to abundance; From abundance to selfishness; From selfishness to apathy; From apathy to dependence; From dependence back into bondage.
Alexander Fraser Tytler

So I say if you look at the history of this country, it is at the end of its life. I think we are at the stage of apathy to dependence. The future doesnt look good for this country.

[fltoo]

Interesting...

I had read about this awhile back, but this new story increases my curiousity.

So, who will this program help? People that are upside down in their homes?

We are currently upside down in our home...owe $260K, worth maybe $240K (at the most)

If this proposal goes through, at 90%, we could go down to $216K...hmm..interesting.

Thanks for posting this!

There was a part that allowed judges in BK hearings to adjust rates or even forgive part of a mortgage, but it was stripped from the bill.

The bill mostly helps builders and businesses related to real estate.

Also, there is a tax incentive within the year of the new bill for people purchasing a foreclosed home. As a RE broker for over 25 years, I liken this to the time incentives were offered to inner city rehabs. Not a bad idea to deplenish existing inventory.

It does not help people who are upside down on their homes.

It also is trying for national licensing for mortgage brokers and loan officers, although I feel that licensing is best left to the state.

[Stilltheone]

There was a part that allowed judges in BK hearings to adjust rates or even forgive part of a mortgage, but it was stripped from the bill.

The bill mostly helps builders and businesses related to real estate.

Also, there is a tax incentive within the year of the new bill for people purchasing a foreclosed home. As a RE broker for over 25 years, I liken this to the time incentives were offered to inner city rehabs. Not a bad idea to deplenish existing inventory.

It does not help people who are upside down on their homes.

It also is trying for national licensing for mortgage brokers and loan officers, although I feel that licensing is best left to the state.

Why WOULDN'T it help homeowners?

Taken from cnn.com:

"The FHA could insure up to $300 billion in new 30-year fixed rate mortgages for at-risk borrowers in owner-occupied homes if their lenders agree to write down their loan balances to 90% of the current appraised value of their homes.

Lenders would also agree to pay upfront fees to the FHA equal to 3% of a home's appraised value. Borrowers must agree to pay an annual premium to the FHA equal to 1.5% of their new loan balance and they must also agree to share with the government any profit they realize from selling or refinancing their home.

The cost of the new FHA program - which would begin on Oct. 1 and be in place for just a few years - would be funded by fees from Fannie and Freddie.

While the bill authorizes the FHA to insure up to $300 billion in new loans, the CBO estimates that the agency is only likely to insure up to $68 billion and help keep roughly 325,000 people in their homes. Those estimates were based on the CBO's assessment of who is likely to qualify under the program and who is likely to default and lose their home anyway despite being in the program."

To me, it sounds like a great plan for someone that is upside down in their home.

[fltoo]

The reason being, people who are upside down in their homes cannot probably afford about 3000. per year for the funding fee and then share the profit with the government, if there is any.

The number of people being helped with this, if at all, is a drop in the ocean compared to how many people are foreclosing.

For instance, in your case, your lender would have to agree to lower the mortgage balance, pay 7200. and you would pay 3240. each year on top of your mortgage payment for the funding fee. Sound reasonable to you?

[banca rotta]

There was a part that allowed judges in BK hearings to adjust rates or even forgive part of a mortgage, but it was stripped from the bill.
The bill mostly helps builders and businesses related to real estate.

Also, there is a tax incentive within the year of the new bill for people purchasing a foreclosed home. As a RE broker for over 25 years, I liken this to the time incentives were offered to inner city rehabs. Not a bad idea to deplenish existing inventory.

It does not help people who are upside down on their homes.

It also is trying for national licensing for mortgage brokers and loan officers, although I feel that licensing is best left to the state.

This was a tough one. They were going to give chapter 13 filers a chance to "cram down" their homes if it's upside down just like 3 year, or older cars, but they naysayers felt like with everything else this would have been abused. Someone doesn't do their homework, buys a house and the minute it's upside down they have a judge strip it down.

I'm on the fence with this one. They should probably let homeowners cram down homes if they lived in them for 5 years or longer similar to car loans.

[fltoo]

From what I am reading banca, the naysayers were afraid of giving relief to irresponsible home buyers and unscrupulous lenders.

Who knows. It is a band aid no matter how you look at it.