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House OKs controversial housing plan
http://money.cnn.com/ rssclick/ 2008/ 05/ 08/ news/ economy/ frank_omnibus_housing_bill...
The House on Thursday passed a contentious foreclosure-prevention package, which still faces a veto threat from the White House and an uncertain fate in the Senate.
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House Passes Housing "Rescue" Bill
http://calculatedrisk.blogspot.com/2008/05/house-passes-hous...From CNN: House OKs controversial housing plan In a 266-154 vote ... lawmakers approved a proposal ... to let the Federal Housing Administration (FHA) insure up to $300 billion in new loans over four years if lenders agree to reduce the mortgage
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Oh Boy, Here Comes “Subprime Relief”
http://dallasdirt.dmagazine.com/2008/05/08/oh-boy-here-comes...Oh Boy, Here Comes “Subprime Relief” But the White House may veto, etc. etc. posted by Candy Evans | May 8th, 2008 3:43pm | filed under Uncategorized
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"The House on Thursday passed a contentious foreclosure-prevention package, which still faces a veto..."
http://realestaterealist.tumblr.com/post/34500845“The House on Thursday passed a contentious foreclosure-prevention package, which still faces a veto threat from the White House and an uncertain fate in the Senate. In a 266-154 vote - with 39 Republicans voting in favor - lawmakers approved a proposal, sponsored by House Financial Services Chairman Barney Frank, D-Mass., to let the Federal Housing Administration (FHA) insure up to $300 billion in new loans over four years if lenders agree to reduce the mortgage principal. To qualify, the lender would have to cut the debt to no more than 85% of a home’s current appraised value. If the FHA-refinanced loans went into default, the FHA would pay the lender the remaining principal owed. While 1.4 million loans are likely to be eligible for such a program, the Congressional Budget Office estimates such a measure would end up insuring 500,000 borrowers. The CBO estimates the FHA expansion program would cost taxpayers $1.7 billion.” - House passes controversial FHA rescue plan - May. 8, 2008
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Week in Review 5/9/08 - Mortgage Rates and Housing Market News - Austin, TX
http://kevinwilhelm.wordpress.com/2008/05/13/week-in-review-...What Did Interest Rates Do Last Week? ** according to Freddie Mac ** 30-yr Fixed – Slightly Lower Last Week: 6.05% Previous Week: 6.06% 1yr Ago: 6.21% 15-yr Fixed – Slightly Higher Last Week: 5.60% Previous Week: 5.59% 1yr Ago: 5.92% 5/1 ARM – Slightly Lower Last Week: 5.67% Previous Week: 5.73% 1yr Ago: 5.92% Highlight of Last Week’s Major Economic Reports Mortgage rates were up and down and all over the place throughout the week, but they ended pretty close to where they started. The stock market drove most of the action last week with the headliner coming from insurance giant AIG, who reported almost an $8 billion loss in the first quarter of 2008. This “whoa!” announcement helped to drive mortgage rates down after several days of an upward climb, which had been spurred on by ‘okay’ economic news that suggested the economy is still treading the little-to-no-growth arena instead of the collapse that had been ominously predicted for the past few months. What to Look for This Week Consumers and inflation take the stage this week with the release of the latest Retail Sales and Consumer Price Index reports. Any data that come in below forecasts may help to keep mortgage rates close to their current levels. However, with stable economic news and persistent inflationary concerns, odds aren’t looking too pretty for much improvement in mortgage rates anytime soon. Short-Term Rate Outlook Stable to Slightly Higher Stay Informed: What’s in the News “House OKs Controversial Housing Plan” from CNN.com http://money.cnn.com/2008/05/08/news/economy/frank_omnibus_housing_bill_vote/index.htm?postversion=2008050818 “Reports: Too Many Apartments” from The Austin Business Journal http://austin.bizjournals.com/austin/stories/2008/05/12/story1.html?f=et180&b=1210564800^1632485&ana=e_vert This update brought to you by Marie Funston of Coldwell Banker Mortgage & Kevin Wilhelm of Coldwell Banker United, Realtors. For more information on Mortgage Rates & How Marie can help you, please contact: Marie Funston Mortgage Advisor Coldwell Banker Mortgage Tel.: (512) 691-6757 Click here for Marie’s Website For more information on finding your perfect dream home here in the greater Austin area, please contact: Kevin Wilhelm, ABR, GRI - Realtor Coldwell Banker United, Realtors 512-417-3915 For more information and to search for homes in the greater Austin area, visit: www.KevinSellsAustin.com
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Bush Admin. broadens its own housing rescue program
http://www.housingchronicles.com/2008/05/bush-admin-broadens...Following great criticism that it was offering no alternative other than to veto the housing rescue bill which passed the House of Representatives last week, the Bush Administration has expanded its own program which relies on the FHA. From a CNNMoney.com story: While Congress grapples with how to help troubled homeowners, the Bush administration is expanding a more modest effort to help at-risk borrowers. The Federal Housing Administration announced changes last week to FHASecure, a program launched in August in response to a housing crisis that threatened as many as 2.2 million borrowers of adjustable rate mortgages (ARMs) with foreclosure. The changes - the agency's second attempt since April to broaden the scope of FHASecure - underline a debate that is front and center in Washington: What's the best way to rescue borrowers at risk of losing their homes as the nation faces one of the worst housing crises in decades? The House - led by Democrats and Republicans in states hit hard by foreclosures - passed a contentious foreclosure-prevention package last Thursday that would back as much as $300 billion in mortgages. A key Senate panel could consider the bill as soon as this week, but it faces resistance from Republican lawmakers and a veto threat by President Bush. At the same time, the FHA on Thursday loosened its rules setting out the criteria that borrowers must meet to obtain an FHA-insured mortgage... In August, FHA originally said it hoped that FHASecure would refinance 80,000 ARMs for delinquent borrowers who would otherwise likely lose their homes. But the FHA's own data shows that the program has so far helped fewer than 2,000 of those homeowners. "The current FHASecure numbers are woefully inadequate," said Jim Carr, chief operating officer of the National Community Reinvestment Coalition, a community advocacy group. "It's not having an impact on the crisis." The FHA, while acknowledging that it has helped fewer borrowers than it originally intended, says nearly 200,000 have gotten refinanced mortgages under FHASecure... Until recently, FHASecure was available only to borrowers who fell into delinquency after low, teaser interest rates on their ARMs reset to much higher rates. In April, the agency announced that it would no longer restrict the program to those borrowers. Instead, all subprime ARM borrowers who were no more than 60 days late - or 30 days late twice in a 12-month period - would be eligible for an FHA-insured loan, as long as the borrower had home equity, or cash, equaling 3% of the mortgage principal. Also as part of this expansion, borrowers who were three months delinquent or late three times in a 12-month period qualified for FHASecure, but these borrowers needed to have 10% home equity or the cash equivalent. To enable borrowers to reach those loan-to-value ratios, lenders could voluntarily write down balances. "The changes we have made with FHASecure will help us reach about 500,000 homeowners in total by the end of this year," said Roy Bernardi, the deputy secretary of the Department of Housing and Urban Development, which runs FHA, told the Federal Home Loan Banks Annual Directors Conference on April 29. In the latest change, the FHA announced on Thursday that it would cover more people by pricing in the risk of default when screening potential borrowers. Since its birth during the Great Depression, the FHA has charged all borrowers the same rate. Starting in July, the agency would initiate higher insurance premiums for borrowers with riskier credit profiles... FHA-insured loans, even with insurance premiums, tend to be more reasonably priced than what borrowers would pay otherwise...After the added premiums are folded into the mortgage payment, the difference comes to only about $12 a month for that $150,000 loan... The timing of the announcement coincided with the House passage of a bill sponsored by Barney Frank, one that takes a much more comprehensive approach to meeting the foreclosure crisis. Critics of the bill, including Bernardi of HUD, charge that it could cost taxpayers billions while the FHASecure program is relatively risk-free... According to Frank's office, a stronger response to the foreclosure crisis is needed. "We already acknowledged that there will be increased risk," said Steve Adamske, a Frank spokesman. "But the housing crisis is affecting the entire economy and will prolong any recession. FHASecure has not helped as many people as it needs to." But will the expansion of FHASecure improve that record?"It might save a few more borrowers," said Carr. "But in the context of reports of foreclosure filings up 112% this year, representing 600,000 homeowners, it's not nearly as robust as it has to be."
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Poll: Americans Split on FHA Bail-out Plan
http://www.garyboomershine.com/blog/2008/05/12/poll-american...Poll: Americans Split on FHA Bail-out Plan May 12th, 2008 Americans are clearly divided on whether homeowners with distressed properties should receive government-targeted aid to help them keep their houses, as are their elected representatives in Congress. According to a recent CNNMoney.com poll, only half of Americans surveyed believe that help should be extended to struggling homeowners. These results are derived from phone interviews with 1,008 adults conducted at the end of April. When the same survey was taken in December, 51 percent of survey participants favored special assistance, while 46 percent did not. The split in popular opinion on the issue also is reflected in the U.S. Congress. Last week, the House of Representatives fiercely debated legislation that would provide federal backing for some at-risk loans and cut the principal owed on some mortgages. The bill passed through the House last week on a 266-154 vote. The proposed legislation would allow the Federal Housing Administration (FHA) insure up to $300 billion in new loans over four years if lenders agree to reduce mortgage principals. In order to qualify however, lenders would be required to drop the debt to no more than 85 percent of a home’s appraised value. Under the bill, sponsored by House Financial Services Chairman Barney Frank, if the FHA-refinanced loans went into default, the FHA would pay the lender the remaining principal owed. Critics allege that the legislation is unfair to those who didn’t bite off more debt than their finances could chew, and say it is an inappropriate use of the FHA to bail out lenders and homeowners — all of whom should take responsibility for their business transactions. Still, due to growing support for the measure in Congress, many expect the legislation to survive bipartisan scrutiny — and predict the bill will gain support from legislators who represent states that have been pummeled by the credit crunch, mortgage meltdown and on-going housing market woes. The White House already has threatened to veto the legislation. Tags: , at-risk loans, Barney Frank, CNNMoney.com, Federal Housing Administration, FHA, FHA bailout, mortgage meltdown, U.S. Congress Posted in Market News
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Brad DeLong on Jeanne Sahadi on Dodd-Franik
http://nathanjmorton.wordpress.com/2008/05/11/brad-delong-on...The Current State of Dodd-Franik Jeanne Sahadi Dodd-Frank: In a 266-154 vote… lawmakers approved… Frank… to let the Federal Housing Administration (FHA) insure up to $300 billion in new loans over four years if lenders agree to reduce the mortgage principal. To qualify, the lender would have to cut the debt to no more than 85% of a home’s current appraised value. If the FHA-refinanced loans went into default, the FHA would pay the lender the remaining principal owed. While 1.4 million loans are likely to be eligible for such a program, the Congressional Budget Office estimates such a measure would end up insuring 500,000 borrowers. The CBO estimates the FHA expansion program would cost taxpayers $1.7 billion. “This bill is very time limited and limited in specifics to a subset of mortgages and meant to mitigate a market failure,” Frank said during the floor debate on Thursday…. [T]he program is limited to loans for owner-occupied residents… lenders and investors would be taking a loss on every loan… borrower[s] would be paying higher-than-usual premiums to the FHA… would share equity in their home with the government. “No borrower who goes through this process will say at the end of it, ‘Boy, that was fun. Where do I buy a ticket to get back on Space Mountain?” Frank said…. If the bill is a bailout for anyone, they say, it’s a bailout for communities across the country, which suffer when home values and property taxes go down because of foreclosures…
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Brad DeLong on Jeanne Sahadi on Dodd-Franik
http://newschannelmortgage.com/2008/05/11/brad-delong-on-jea...The Current State of Dodd-Franik Jeanne Sahadi Dodd-Frank: In a 266-154 vote... lawmakers approved... Frank... to let the Federal Housing Administration (FHA) insure up to $300 billion in new loans over four years if lenders agree to reduce the mortgage principal. To qualify, the lender would have to cut the debt to no more than 85% of a home's current appraised value. If the FHA-refinanced loans went into default, the FHA would pay the lender the remaining principal owed. While 1.4 million loans are likely to be eligible for such a program, the Congressional Budget Office estimates such a measure would end up insuring 500,000 borrowers. The CBO estimates the FHA expansion program would cost taxpayers $1.7 billion. "This bill is very time limited and limited in specifics to a subset of mortgages and meant to mitigate a market failure," Frank said during the floor debate on Thursday.... [T]he program is limited to loans for owner-occupied residents... lenders and investors would be taking a loss on every loan... borrower[s] would be paying higher-than-usual premiums to the FHA... would share equity in their home with the government. "No borrower who goes through this process will say at the end of it, 'Boy, that was fun. Where do I buy a ticket to get back on Space Mountain?" Frank said.... If the bill is a bailout for anyone, they say, it's a bailout for communities across the country, which suffer when home values and property taxes go down because of foreclosures...
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The Nonperforming Refi Play
http://notebuyingprofits.com/blog/?p=35The Nonperforming Refi Play May 10th, 2008 This is what it’s all about (from the LA Times): Jared Lanning, struggling to pay a home loan on which he owed more than his house was worth, was thinking he might just let the lender take back the property. Then he got a call one evening from an Orange County investor who had bought his mortgage. “I want out of your loan,” said the investor, Evan Gentry, chief executive of G8 Capital of Ladera Ranch, who offered to lower the balance and the interest rate. Lanning, a crane operator in Englewood, Colo., was skeptical. A phone pitch, after all, had led to his getting the unaffordable loan in the first place. But Gentry was legit: He helped Lanning get a new Federal Housing Administration-insured mortgage — with a $12,000 lower balance. Gentry also paid $5,000 in closing costs for the new loan. Lanning’s new monthly payment is $200 less than before. Investors — including big fish like former Countrywide Financial Corp. President Stanford Kurland as well as smaller fry like Gentry — are buying loans on the cheap from lenders who want them off their books. By paying less than face value for the mortgages, the new holders can modify loan terms, including shrinking the amount owed, and still make money. Partner up with a good mortgage broker who can refi you (as the note holder) out, and buy as much as you can right now. Speaking of which, make sure you read this update, courtesy of Barney Frank. Tags: bank notes, defaulted paper, discounted paper, donna bauer, Foreclosure, jeff kaller, john behle, mortgages in default, non-performing notes, nonperforming notes, note broker, note buyer, note buying, note bying, notebuying, notebying, noteworthyusa.com, ron legrand, russ dalbey, thenotebuyer.com Posted in Note Buying 101, Real-Life Case Studies | No Comments »
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Is The Bailout Of Homeowners Facing Foreclosure Really Immoral?
http://jayovalle.wordpress.com/2008/05/09/is-the-bailout-of-...I know beforehand that I will be a voice in the wilderness. Carnal use of the word aside, I can’t see how “immoral” applies to the effort to try to help a tiny percent of Americans whose only sin was to want to own a home. This is America. In America we are threaded together by want. Want what your neighbor’s got or better. It is Consumerism in its distilled form. It is the engine, the soul, that powers Capitalism. Let’s see. The last time I looked up the word immoral it meant: corrupt, wicked, evil, unchaste, impure, reprehensible, unworthy and many other synonyms too many to mention here. But is this effort really immoral because it was so easy to get a mortgage when the market was hot, because we didn’t read the small print, because we weren’t able to foresee the downturn, because we used our equity to buy more stuff that, in turn, kept the engine humming, or because we were plain greedy? It is the American way. We were just being ourselves, a country of spendthrifts with a negative saving rate. I read with dismay that in a recent poll conducted by CNN/Money, 48% of Americans —and the number is still growing — believe that homeowners in trouble should not be bailed out. Congress is also split on the issue, with most Republicans opposing such legislation and Bush promising to veto it. In SmartMoney Jonathan Hoenig argues, among many things, that: “...the real reason to oppose a bailout isn’t that it’s impractical, but that it’s immoral.” He goes on: “In America, we have the right to “life, liberty and the pursuit of happiness,” but not the guarantee we can live in the four-bedroom Colonial that’s priced way beyond our means. It might sound cold, but homeowners who can’t pay their mortgages should not expect to be able to keep their homes.” Well, I agree that it is very American to have free-markets were businesses compete with minimal government interference, as it is the responsibility of these business to bear the cost of high risk investments gone sour. While we all embrace the free-market idea, the spirit of Adam Smith is nowhere to be found when it comes to government bailouts. Let’s review some of these. In 1971 Congress passed a $250 million loan guarantees to prop Lockheed Martin, which eventually recovered and merged with Martin Marietta in 1995. Chrysler in 1979 was virtually bankrupted and was rescued by Federal Government Guarantees totaling $1.2 billion. In the early 1980s the Federal Government bailout of the Savings and Loan industry ultimately cost the taxpayers $125 billion. I think we are still paying for this one. In 1984 the FDIC and the Federal Reserve rescued Continental Illinois Bank. In 1991 the Bank of New England was quietly funneled a billion dollars by the U.S. Treasury to boost its liquidity. In 1998 the Federal Reserve orchestrated a bailout of Long Term Capital Management Hedge Fund at the tune $3.6 billion. In 1995 President Clinton went to Mexico’s aid after a rapid devaluation of the peso, persuading countries and banks to lend the country $50 billion guaranteed by the U.S. In 1998 the U.S. and the International Monetary Fund bailed out South Korea. Total package $57 billion plus an additional $10 billion in emergency aid. In the days after the attacks in 2001, the airline carriers estimated that losses would come to $24 billion as people elected not to fly. Congress quickly authorized $5 billion in cash infusions to shore up the industry, with the funds apportioned according to each carrier’s size. Then it followed with $10 billion in loan guarantees and set up a government compensation fund for victims of the attacks. In an opinion column The National Review quotes. Scott Garrett (R-N.J.), one of the very few members of Congress questioning the federal bailout of Bear Stearns:” Government isn’t supposed to be in the business of picking winners and losers,” Garrett remarked in a phone interview while en route to Washington from New York. “But here we are. Hardly anyone seems to mind.” Given the well documented pattern of moral hazard among corporations, banks and even countries, it is hard to understand the harsh feelings being generated against Lilliputians homeowners in financial distress. There are approximately 102 million homes in the USA and a little over 1.5 million are in trouble with their mortgages. Approximately a third of these are small investors and there will be no help for them. The plan (H.R. 5830: The FHA Housing Stabilization and Homeownership Retention Act of 200 that just passed Congress approval yesterday, will only back loans to re-structure existing loans on principal residences and lenders will have the option to participate. It is $300 billion in guarantees over the next 4-5 years. I understand the Congressional Budget Office estimates such a measure would end up insuring approximately 500,000 borrowers. Estimated cost to taxpayers: $2.7 billion! So what’s the big deal? Considering the planned $300 billion in subsidies to rich farmers, the annual $8 plus billion in amoral subsidies to oil companies or the $ 50 billion a year we give away to other countries, most of which don’t even like us or the $3 trillion for the war ( 1 trillion still unacounted for), or the crushing national debt at $9.2 trillion, the $2.7 billion over 4 years for helping fellow Americans, is just less than pocket change.
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