Housing Bailout

[Dredly]

Looks like Obama has leaked some of the details around his plan to bailout the people who bought homes they couldn't afford.

http://www.cnbc.com/id/29256424

President Obama's much-anticipated plan to deal with the U.S. housing crisis aims to help as many as 9 million families avoid foreclosure on their homes, one of the root causes of the global financial meltdown.

Barack Obama
AP

"The plan not only helps responsible homeowners on the verge of defaulting but prevents neighborhoods and communities from being pulled over the edge too," according to a summary of the plan that Obama is due to formally unveil at 12:15 p.m. EST in Mesa, Ariz.

It aims to help 4 million to 5 million "responsible homeowners" to refinance and another 3 million to 4 million homeowners by lowering the risk of imminent default with a $75 billion "homeowner stability initiative" that will help to reduce their monthly payments.

The Obama administration's summary said the plan could offer a buffer of up to $6,000 against value declines on the average home.

The plan also aims to increase confidence in mortgage giants Fannie Mae and Freddie Mac through Treasury funding to "ensure the strength and security of the mortgage market and to help maintain mortgage affordability," the plan summary said.

"This initiative is intended to reach millions of responsible homeowners who are struggling to afford their mortgage payments because of the current recession, yet cannot sell their homes because prices have fallen so significantly," the summary said.

As part of the housing rescue plan, the Treasury Department will double its financial support for housing finance giants Fannie Mae [FNM 0.59 0.02 (+3.51%) ] and Freddie Mac [FRE 0.58 0.03 (+5.45%) ] to allow them to play a bigger role supporting housing as part of a fresh foreclosure mitigation plan.

The Treasury said it was increasing its preferred stock purchase agreements with the two government-controlled companies to $200 billion each from $100 billion.

It also said it was raising the limit on the size of the mortgage portfolios the two companies can hold by $50 billion to $900 billion each, along with a corresponding increase in their allowable debt outstanding.

The plan will commit up to $275 billion in federal funds toward refinancing and modifying mortgages to make them more affordable.

The plan will include $50 billion from the $700 billion financial rescue fund to help reduce payments on "at-risk" mortgages in danger of foreclosure.

Fannie and Freddie will kick in another $20 billion to $25 billion to help modify these loans, the official said.

[PocketProtector]

My theory as a Realtor is that housing will be the last to recover. Doesn't matter how low the rates go or how much O redistributes, people will not be making the biggest investment of their lives until they are secure in their jobs.

Since O and Rectal Rahm are intent on destroying capitalism, I can't say I foresee that happening anytime soon.

[billamj]

That's just wonderful. Let's give more money to Fanny and Freddie, we know how well they've done with that in the past. Even better let's make a point of putting our greatgrandkids in debt, we've already done so with ourseleves, our kids, and our grandkids.

[Dredly]

My theory as a Realtor is that housing will be the last to recover. Doesn't matter how low the rates go or how much O redistributes, people will not be making the biggest investment of their lives until they are secure in their jobs.

Since O and Rectal Rahm are intent on destroying capitalism, I can't say I foresee that happening anytime soon.

Housing is never going to "recover". At best it will flatline but thats not going to happen anytime soon. We aren't at the bottom yet and there are still LOTS more layoffs coming. So far state workers have been fairly safe... but thats definately not the case anymore and they are going to start getting cut.

we are a ways off from the bottom and this bullshit socialist piece of crap that is being passed will do nothing. its not even a band aid. its like sticking a piece of toilet paper on a severed limb.

[Paradigm]

More change you can believe in!



So...why am I working hard and paying my mortgage?

[dc dalton]

well ..... it's not like we didn't know it was coming so we can hardly be shocked.

Yes more BS spending, more added to the national debt, more dollars 'printed' and so on and so on and so on.

In some ways though I am torn on this one. While I bust my butt to pay my mortgage and am madder than hell at people that either used their home as an ATM or bought more than they knew they could afford or took some dumbassed loan that was no money down, interest only (or less) there are others I personally know that through no fault of their own are now lumped in with those other idiots.

People that worked hard, paid their mortgage on time ... really good people. People that then got laid off because of this economic mess and after time started to fall behind on their mortgage. These are the people that make me feel somewhat torn about 'helping out' SOME borrowers. Granted these are just a small portion of homeowners that are behind the eight ball.

I don't know, as I said I am really torn on this one ... personally I think if they are going to 'help out' homeowners there should be some test before they get anything ... if you fall into any of the 'dumbass' categories well then tough luck, you get squat .... but if you are in this position because you have lost your job, your business has suffered because of this mess or maybe you got ill and fell behind then they can get help.... again torn to say the least.

And I do agree with Dredly, we are no where's near the bottom of this mess. My concern is where the hell IS the bottom? How many of our houses will be worth 1/2 what we owe on them? The term 'how low can they go' isn't even funny any more. Will my house be worth less than I paid for it 15 years ago?

But on another note, at least they aren't just throwing money at the damn banks again expecting them to do something ... but oh yeah, that's next weeks 'bailout' isn't it?

[jmanzini]

More change you can believe in!



So...why am I working hard and paying my mortgage?

That's the pisser. They keep talking about 1 out of 10 morgages are failing. What about the 9 out of 10 that are struggling to pay theirs. Where's our rebate? Reduce our interset rates without refinance charges.

Oh, I forgot ... we are getting our $13.00 weekly rebate.

[PocketProtector]

we are a ways off from the bottom and this bullshit socialist piece of crap that is being passed will do nothing. its not even a band aid. its like sticking a piece of toilet paper on a severed limb.

Actually it's like pouring salt on the severed limb. Anyone who does not see the real intent of our new Odministration is seriously drinking the Kool-Aid. Recovery is not their intention. Power grab is. The coup de grace will come in the summer of 2012 when Reid/Pelosi/O pass and sign the Amnesty Bill, just in time to get 10 million new Dem voters. We are in deep $hit.

[dc dalton]

That's the pisser. They keep talking about 1 out of 10 morgages are failing. What about the 9 out of 10 that are struggling to pay theirs. Where's our rebate? Reduce our interset rates without refinance charges.

Oh, I forgot ... we are getting our $13.00 weekly rebate.

Yeah ain't that the shit? Hell if they are going to reduce rates or cut mortgage premiums why not just do it across the board? EVERYONE gets a rate cut! When the FED cuts the prime rate all the banks get the benefits of it so why not do the same with homeowners. Now you want to 'stimulate the economy' tell me cutting the monthly mortgage payments of ever homeowner in the US wouldn't get people out shopping!

[PocketProtector]

That's the pisser. They keep talking about 1 out of 10 morgages are failing. What about the 9 out of 10 that are struggling to pay theirs. Where's our rebate? Reduce our interset rates without refinance charges.

Oh, I forgot ... we are getting our $13.00 weekly rebate.

The answer is not renegotiating mortgages, that will destroy the banks worse than they already are.
The answer is to cut the ridiculous social spending that has been going on for 40 liberal years and coincidentally our taxes. Anyone looked at their pay-stub lately ?? Do you really think we should be paying these ridiculous rates plus all the other taxes NOT LISTED there? Plus all corporate taxes passed along to us??? Plus tolls, excise taxes, transfer taxes, school taxes, capital gains taxes, yada yada yada. This is what's killing the Golden Goose and O's plan is to give us more of it ?? Exponentially more of it. WOW
Jeezus the Boston Tea Party started from a 1% tax on tea and we accept this BS like freaking sheeple.