BOHICA...
Posted on 09/01/2007 6:16:06 AM PDT by Diana in Wisconsin
WASHINGTON (AP) - President Bush outlined ways the federal government can help troubled borrowers keep their homes Friday in an effort to address rising foreclosures fueled by the mortgage crisis.
The administration's first attempt at dealing with a wave of defaults is not aimed at bailing out lenders, however.
"It's not the government's job to bail out speculators or those who made the decision to buy a home they knew they could never afford," Bush said in the Rose Garden. "Yet there are many American homeowners who could get through this difficult time with a little flexibility from their lenders or a little help from their government."
The U.S. economy enjoyed a strong revival in the spring but since then has been threatened by the worst housing slump in 16 years and a widening credit crisis that has sent financial markets on a roller coaster ride.
The president insisted that the economy was strong and could weather turbulence in the markets.
He said the mortgage market, especially the subprime sector, has shown particular strain. One of the most troubling developments has been an increase in adjustable-rate mortgages, which start out with low interest rates, then reset to higher rates after a few years.
"This has led some homeowners to take out loans larger than they could afford based on overly optimistic assumptions about the future performance of the housing market," Bush said. "Others may have been confused by the terms of their loan, or misled by irresponsible lenders. Whatever the reason they chose this kind of mortgage, some borrowers are now unable to make their monthly payments, or facing foreclosure."
Foreclosure and late payments have spiked, especially for so-called subprime borrowers with blemished credit histories or low incomes. Higher interest rates and weak home values have made it impossible for some to pay or to keep up with their monthly mortgage payments. Some overstretched homeowners can't afford to refinance or even sell their homes.
Mortgage foreclosures and late payments are expected to worsen. Some 2 million adjustable rate mortgages are to reset to higher rates this year and next. Steep penalties for prepaying mortgages have added to some homeowners' headaches.
Bush said the Federal Housing Administration, a government agency that provides mortgage insurance to borrowers through lenders in the private sector, would launch in coming days a program called FHA Secure. The program would let homeowners who have good credit histories but can't afford their current mortgage payments to refinance into mortgages insured by the FHA.
"This means that many families who are struggling now will be able to refinance their loans, meet their monthly payments and keep their homes," Bush said.
Bush also urged Congress to modernize and improve the FHA so more homeowners could qualify for the mortgage insurance provided by the agency. Last year the House passed legislation to modernize FHA, but Congress has not yet sent a bill to the White House. "I look forward to signing a bill as quickly as possible," Bush said.
Bush also pledged to work with Congress to reform a key housing provision of the federal tax code, which will make it easier for homeowners to refinance their mortgages.
"Let's say the value of your house declines by $20,000 and your adjustable rate mortgage payments have grown to a level you cannot afford," Bush said. "If the bank modifies your mortgage and forgives $20,000 of your loan, the tax code treats that $20,000 as taxable income. When your home is losing value and your family is under financial stress, the last thing you need to do is to be hit with higher taxes."
Bush also said the administration would launch a new foreclosure avoidance initiative to help homeowners figure out a way to refinance. He said Housing Secretary Alphonso Jackson and Treasury Secretary Henry Paulson would reach out to groups that offer foreclosure counseling and refinancing assistance for homeowners.
And he said the federal government was taking actions to make the mortgage industry more transparent, more reliable and fair to reduce the likelihood of these lending problems happening again.
*ROLLEYES*
Hmmm #1, "a little flexibility from their lenders" = not a snowball's chance in H - E - double hockey sticks UNLESS those corrupt lenders (lending to people who were losers from the get-go) are promised $$$ from the feds.
Hmmm #2, "a little help from their government" = geezlaweez, another gubmin giveaway.
Why do we have to bail out homeowners who are too stupid to live? They bought a bill of goods and should take the consequences of listening to corrupt real estate agents and lenders (banks). Isn't that part of growing up?
How about cutting them all $2000 checks and see what happens.
I’m sick of footing the bill for everyone else.
Hey, what do I GET for buying a home within my means and paying my mortgage ever month?????
Gee Mr. Bush, thanks! It is always nice knowing I can make whatever irresponsible decisions I desire and can count on the government to give me a hand! Oh wait, isn't that liberalism? Adam Smith must be rolling in his grave.
Define mortgage crisis
People can't pay their credit card bills,too. Does that mean there's a credit card crisis?
The answer is NO!
The people and the institutions that made and took these inadvisable loans should suffer the consequences of their own decisions. The free market will work this out just fine thank you...and should be allowed to. Otherwise, just like illegal immigration, we will invite a lot more of the same.
Shamesdidy.
The shaft.
Oh, and you had better learn spanish.
Memo to government: "BUTT OUT!"
BOHICA...
And, WHY would you sign ANYTHING you didn't understand? Who's fault is that?
I was thinking the same thing, if they are givings cut rate refi’s I want one too. After all fair is fair. It is time for Atlas to shrug.
Apparently it is... And they got whay they paid for.
From www.opensecrets.org...
Hedge Funds: Long-Term Contribution Trends
Commercial Banks: Long-Term Contribution Trends
Finance/Credit Companies: Long-Term Contribution Trends
Yes, Virginia, they can be bought.
“Hey, what do I GET for buying a home within my means and paying my mortgage ever month?????”
You get the warm fuzzy of knowing you coulda had a nicer house in a nicer neighborhood if only you woulda taken that ARM and listened to the honest real estate agent and mortgage lender.
Really they are looking out for you.
Hey, what do I GET for buying a home within my means and paying my mortgage ever month?????
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
You are granted the joy of paying income taxes! And property taxes! And excise taxes! And sales taxes! And taxes on taxes! Ain’t life grand?
Grab some preparation H, because here comes teh government.
AMEN and...why would President Bush even propose such an idea? Well, he didn’t care what we said when we opposed the immigration bill overwhelmingly so why should he care about us now? This man has changed.
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