We ARE the authorities, prole
Posted on 03/07/2010 8:13:19 PM PST by reaganaut1
In an effort to end the foreclosure crisis, the Obama administration has been trying to keep defaulting owners in their homes. Now it will take a new approach: paying some of them to leave.
This latest program, which will allow owners to sell for less than they owe and will give them a little cash to speed them on their way, is one of the administration’s most aggressive attempts to grapple with a problem that has defied solutions.
More than five million households are behind on their mortgages and risk foreclosure. The government’s $75 billion mortgage modification plan has helped only a small slice of them. Consumer advocates, economists and even some banking industry representatives say much more needs to be done.
For the administration, there is also the concern that millions of foreclosures could delay or even reverse the economy’s tentative recovery — the last thing it wants in an election year.
Taking effect on April 5, the program could encourage hundreds of thousands of delinquent borrowers who have not been rescued by the loan modification program to shed their houses through a process known as a short sale, in which property is sold for less than the balance of the mortgage. Lenders will be compelled to accept that arrangement, forgiving the difference between the market price of the property and what they are owed.
“We want to streamline and standardize the short sale process to make it much easier on the borrower and much easier on the lender,” said Seth Wheeler, a Treasury senior adviser.
The problem is highlighted by a routine case in Phoenix. Chris Paul, a real estate agent, has a house he is trying to sell on behalf of its owner, who owes $150,000.
(Excerpt) Read more at nytimes.com ...
Forcing Fannie Mae, Freddie Mac, and FHA to do short sales is one thing...forcing hedge funds and sovereign wealth funds quite another.
Pay people to sell homes at a loss.
good lord.
Do they never think things through??
They should have bailed out the homeowners and not the banks. This has been the biggest transfer of wealth since whenever.
Government uses tax dollars to bail out the banks. Taxpayers get booted out of their house and then end up paying taxes to pay for the bank bailout.
Why they heck would you be against homeowners actually getting a break given the current situation? In an ideal world, none of this would have happened. But people that were supposed to be doing their job to regulate did not do it. Why should the little people pay for the mistake while bankers get multi-million dollar bonuses. Please explain.
This plan is emminent domain for the banking industry. The government is forcing banks to accept the sales amount as loan payoff. I cannot understand how this law can be constitutional. It seems as ex post facto law rewriting existing contracts. This scheme will have a devasting impact on the home loan market.
Yeah, the same banks will finance the new loans, for a nice double dip. Then we can do this all over again next year when the new loans are in default...
Your reasoning is just populism. The Democrats want to buy votes by violating the property rights of note holders. Do you understand that the note holder has an agreement with the borrower? Do you understand the Democrats want to use the power of government to change the agreement? A mortgage involves risks on both parties. Many mortgages would not be made if the loans had the terms the Democrats want to force on lenders now. Note holders are entitled to enforce the contractual terms of the loans. Anything short of contractural terms is a property rights violation by government.
Not only what you comment on, but also....are the homeowners also relieved of the the negative US tax consequence penalty for having their home devalued? Anything given by the govt. as an incentive may be reclaimed through the taxes currently levied by the process of devaluation, thus making the offer of the govt. incentive,...worthless.
WHAT THE F....???? IS T JHIS A JOKE? Just disgusting. Obama will destroy America.
Damn. I knew I should have refinanced.
This is the start of those “green” jobs we were promised! Get people to leave their homes, plow the houses under, remediate the land back to it’s original state. Oh, and those displaced out of work folks? Instant wards of the state, perfect Democrats!
Part of the problem that I see with paying people to sell in a short sale is that MANY of these folks took out mortgages they couldn’t afford! Why should people that earn minimum wage be given a mortgage for a home in excess of $200,000?
And who gets screwed when the loans are forced to take these lesser amounts? WE DO, the taxpayers that bought a home we could afford and have made all our payments! Interest rates will go up because banks will be more afraid to lend, thus we all pay.
More government regulations and bailouts to protect people from their own foolishness. That's the ticket. Zero down payment and interest only loans for the immediate gratification dream house, instead of the affordable starter home. Then you take out a second mortgage to furnish the dream house and buy a nifty car. I don't want to pay for your excessive desires, no matter how good the sales pitch. Take responsibility for your own mistakes.
IF that were the case, I would agree with you. But you know that was not the case. And as much as I am a conservative it does not make me a partisen hack for the Republican party. Whether we like to hear it on here or not, the executive branch for 8 years failed in its regulatory job and as a result this mess was created. Yes, the Dems were there too.
But this has nothing to do with Dem or Rep or even populist. It certainly has nothing to do with contractual terms when the rules of the game were violated to such a degree.
I will give you this point, though. Many people got into homes they could not afford with loans that were absolutely stupid.
Just to elaborate my views a bit by way of my situation, my wife and I were approved for a loan amount way over what we could afford and we did not take it. The realtor said, just go variable and you can have the house. We said no way and got a house we could afford at a low fixed rate. After we bought it, we skrimped and saved and paid it off as fast as we could (six years). We saved heaps on interest.
That said, the banks got bailed out for their stupidy. Why shouldn't the homeowners also. Personnaly, I am real tired of the corruption that is wiping out the middle class and you should not be making excuses for it.
We ARE the authorities, prole
The government is whistling past the graveyard!
Of course the amount they are under water when they sell will be counted as ordinary income for tax purposes.
Moral Harazd
Whoops. I meant Moral Hazard.
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