Democrats Tailor Foreclosure Bill To Obama Goals

From Washington Post:

As President Obama prepares to announce a program next week to stem the soaring rate of foreclosures, key Democratic lawmakers say they are planning to craft a housing bill that would give the administration the authority it needs to carry out several elements of the initiative.

Read the whole story from Washington Post

Comments

[funkalicious]

Obama is willing to to throw out all contract law for a home owner ship initiative.

I wonder if the stimulus plan has a provision to hire millions of bankruptcy judges schooled in House appraisals. There will be a huge backlog and hearings will wait years to settle this is a horror show in the making.

[WalkaboutMike]

The banking practices are fueling foreclosures by increasing their credit card fees.

We are in a global recession. They needed help because of their bad business decison, so via TARP we give them $70Billion + insuring bad assets in the hundreds of billions of dollars. However, at the end of the day, we are gouged by the same industry that we helped out.

What is wrong with this picture?

Read more at - http://www.TheCreditCardAct.com / It's time to wake up.

[Pquilson]

Here is the deal with credit cards: Use them frugally, then, when the bill comes, pay it off. No interest. In other words, if you can't pay for it, do not buy it.

[sueinmn]

We bought our home 9 years ago and back then the realitor (friend) boldly stated the realotirs control the housing values. The kept going up consitantly for years and I believe many appraisers were in on the game. Everyone was turning a hefty frofit. Now they can all starve! Home prices need to drop along with county/city assessments. I do wonder how this is effecting the property tax collections!

[sueinmn]

Back in the 70s my 1st spouse and I built a home and the contractor then claimed he charged out 2 1/2 times the lumber bill for total cost of the house. I have no idea how they figure it now or house home values vary from region to region but it sure seems like the entire system had to implode soon or later. regardless of the bad mortgage issues. wages just never kept up and this needs to change in this country.

[JoeBlough]

The price of housing must be allowed to reach parity with value. Prices shot up 80% in the last eight years. Value did not. To artifically prop up prices will only deter the final result, at a great expense. This is the nature of a bubble. Better to let the market for housing clear itself out. How can the government afix a price to something if they don't know its value?

[Pquilson]

Here is the thing. A value of anything, home, car, tv, whatever, is the price someone is willing to pay for that thing. It appears to me that the federal government, through this mortgage mess, has been involved in creating an artificially higher price. If someone who wants to buy a home has not the ability to pay for that home at that price, then that person should not be able to buy that home. What happened is, in my opinion, the value of a home was artificially placed by the ability of a buyer to obtain 100% financing, or an ARM. This kept the price of the home above what it should have been, and for a little while, the buyer was able to live in that home. Until the mortgage adjustments happened. This is why I believe that ARMs should be outlawed. It is difficult enough with a fixed rate mortgage, if even one thing goes wrong. With an ARM, yet another thing that could go wrong almost always does.

[MossyOak]

Whatever measures the administration proposes, I hope they distinguish between "a home" and "an investment­." There is a difference between a family of four trying to hold on their residence and a person who put all their money into speculation properties and then walked away when the prices fell. In places like Florida and Arizona, real estate speculation was fueled by more irrational exuberance than the stock market ever was. At least when you lose in the stock market, someone else wins. In the real estate market, empty foreclosed eyesores will depress the market for everyone who tried to put their eggs in their home basket.

I also hope whatever measures the administration proposes lends a helping hand to people trying to live within their means, but were fleeced by the con artist banks, mortgage refinancers, mortgage repackagers, insurers and appraisers who prayed on all the people who couldn't understand the fine print even if they did read it.

[judiNJ]

One of the reasons the housing bubble blew up like this, was real estate appraisers and banks started padding the value of homes. Even though to get an appraiser's licience, you had to take a course in ethics (why anyone believes you could TEACH ethics to adults is beyond me). Many honest appraisers would bring in accurate appraisals based on fact, and then dishonest company owners would raise the value. Many of those appraisal companies went belly up when the owners were indicted. Just goes to show what goes on in the money business and we are living with this even today.

[MomfromTexas]

I strongly believe that what we are seeing is a re-adjustment in our society to a more realistic fiscal world. I seriously question whether or not our society can produce enough well-paying jobs to give two-income home owners the money they need for a $500K mortgage, such as the people in California have been paying to own a simple three-bedroom home. You can lower the interest rate, but what really needs to happen for a long-term effect is the prices of the homes need to come down, and mortgages need to be calculated on the current value of the home.

I know people don't want to hear that because they have used their homes as investments, but simply changing the interest rate will only allow people to keep their heads above water, which is what they've been doing for ten years now. That's why they've maxed out their credit cards and taken out second mortages. It's been an illusion, and, somehow, our society has to accept this and come back to reality. If we would allow this to happen, in the end, we would be living in a much more affordable and realistic world.

[nellie]

Another bill to get behind already. This is going to be one roller coaster of an administration.

[MossyOak]

It certainly beats the putt-putt course we've been playing on for the past eight years.

[stargazer13]

all I know is I pay my mortgage for thirty years and then when it,s paid I still never own my home because if I fail to pay those property taxes year after year I lose my home WHY IS THAT

[Zhonni]

I wonder the same myself sometimes, although, I could come up with some reasons.

[MossyOak]

Because your property taxes fund education, local roads, fire and police protection, libraries, and a host of other services you will continue to enjoy as long as you live on your property.

[knowBuddhaU]

Hey HuffPo, your headline is wrong: "Plan Would Change Bankruptcy Law," it says, but the actual article says it was left out.

~~~~~~~~~~­~~~~~~~~~~­~~
The legislation would include a provision changing the bankruptcy law to allow judges to modify the mortgages of distressed homeowners, including by reducing the principal of the loan to the property's current market value, he said. This proposal has already gained support from one House committee but drawn fierce objections from Republicans and the financial industry.

**** Though Obama supports this provision, he declined to include it in the stimulus bill approved yesterday, fearing the bankruptcy measure would derail the overall legislation, Democratic congressional sources said.**** [Emphasis added.]
~~~~~~~~~~­~~~~~~~~~~­~~~~~~~

Would it be the measure, or the financial loan shark industry and and their Congressional thugs?

[RTIII]

This is yet another of the daily debacle that is Hu fPo hea.dline writing - it's all about getting you to click.

Hu fPo doens't have any ed.itors, either - it's all about reacting fast and keeping costs down.
.

[ObjectiveRealist]

Not good enough. The lenders and the mortgage-backed securities traitors need to be prosecuted for the collusion that artificially inflated the price of real estate nationwide, and forced to reduce the price of every mortgage by twice the amount of the original fraudulent increase. Then, responsible homeowners will have what's rightfully theirs. Don't call it "relief" call it plain justice and rule of law.

[bygollymissmolly]

How about they pass a law prohibiting banks from charging more than the prevailing rate for home loans. That would solve the problem over night for most homeowners.

The banks brought this all down upon themselves when they chose to up the teaser rates homeowners got (usually around 4.5%) to anywhere from 9% to 20% knowing full well that would drive the mortgage payment up to an amount that the homeowner could no longer afford. I truly believe they did this on purpose. They knew that the government would come bail them out when homeowners started defaulting on their homes and they wanted there to be a supply of devalued foreclosed houses on the market for their rich friends to buy up as investments. I know a real estate agent in Bend, Oregon an area particularly hard hit by the mortgage crisis. She says that 70% of the homes she is selling are being sold to individual investors and corporations.

[ldsb]

I agree- drop ALL mortgage rates to 4%- that would solve most people's problems. Those who are in troube could keep their homes, those not in trouble have more money to spend buying things. Simple, cost effective foreclosur­e?stimulus plan all in one. The gov't has to complicate everything.

[swo68]

Frank has to go. Could you imagine how hard it would be to get a house loan?

[Maxbyte]

This is badly needed reform, and I hope it happens. I don't understand what Republicans had in mind when they tried to make it virtually impossible to declare bankruptcy. In some instances it has been the consumer's failure to take their finances seriously. In other instances it's the loss of a primary job, a disabling injury, or death of a primary breadwinner.

In most instances, I believe, it is because predatory lenders, like JP Morgan Chase and a number of other large banks conceal provisions that require attorney's to understand. They then stab their victim in the back repeatedly. Entire websites exist for victims of Morgan / Chase. And for those victims especially, there must be legal safeguards for consumers.

[PhilipTaylor]

Stimulate the Economy with $7.4 Trillion!

A National Reset Interest Rate on Mortgage Day can increase consumers' Cash Flow by $7.4 Trillion!

If all mortgages in the US were automatically Reset to the current lowest fixed rate, unless you have a better rate already, this would mean the average rate of over 8.5% (including the many adjustable rate mortgages that are much higher say 16%) would be reset to the lowest curent rate of 4.25%.

Since the average home in America is now $175,000, the resulting savings per home per year would be $7,437. On 100 million homes the increased cash flow could reach $7.4 Trillion!

[ModeratePoliticalJunkie]

umm...I think its $743.7 BILLION (100 X 7,437 = 743,700 X 1,000,000 = 743.7 Billion)

See there a 9 zeros in a billion and there are 12 in a trillion

a trillion 1,000,000 X 1,000,000
a billion is 1,000 X 1,000,000

[KQuarksSuperKollider]

You do know if that happens the banks won't have money to lend to anyone and it would create great depression the remix.

[totaldisbelief]

$7.4 trillion is about $55,000 for every taxpayer in the U.S.
Send a check for $55,000 to every taxpayer,the banks will get that money very quickly as taxpayers pay off mortgages,loans and credit cards; but at least some real human beings will be helpedin the process.

[ldsb]

That would be very short term thinking. Lowering the mortgage rate gives a long term stimulus- prevents people from blowing thru the money on stupid purchases. Requires at least the level of responsibility to continue to pay your "new" mortgage payment.