$275 Billion Mortgage Rescue Will Stem Foreclosure Fallout, Democrats Say

Tuesday, February 07, 2012

Mortgage loan applications have increased 23% this last week due to record low rates.

Orlando, FL (MBNews.org) -- Historic record low have encouraged many homeowners to refinance according to the Mortgage Bankers Association.

We have seen refinancing activity climbed 26.4% just this week week ending January 13, to its highest level since early August, the MBA reported. Meanwhile applications for new mortgages climbed 10.3% week-over-week.

Time to buy a house? Home prices have fallen and mortgage interest rates are lower than they have ever been.

Miami (MBNews.org) — Time to buy a house? Home prices have fallen and mortgage interest rates are lower than they have ever been.

A recent report from J.P. Morgan Asset Management, titled “Housing: A time to buy,” written by David Kelly and David Lebovitz, made the case for why a home may be a wise purchase. Read more: Mortgage rates plunge beyond expectations.

Although the U.S. housing market remains extremely depressed, we believe that given current valuations and demographic dynamics, now may be the time to consider an investment in housing,” the report said.

Goldman, Two Firms Agree on Foreclosure-Signing Practice

Goldman Sachs will compensate some home loan borrowers for wrongful foreclosures under an agreement reached with a New York state banking regulator.

The agreement, which New York financial services superintendent Benjamin Lawsky reached with Goldman [GS 112.16 -4.06 (-3.49%) ] and Ocwen Financial [OCN 13.28 -0.52 (-3.77%) ], contains several measures to strengthen the oversight of foreclosure proceedings.

It also will allow Goldman's planned sale of its Litton Loan Servicing LP unit to continue.

U.S. asks Bank of America to report back up plans if conditions worsen

The U.S. Federal Housing Finance Agency plans to sue "more than a dozen" major banks for billions of dollars over alleged misrepresentation of mortgage-backed securities sold before the housing bubble burst, the New York Times reported late Thursday.

U.S. asks Bank of America to report back up plans if conditions worsen

U.S. regulators have pushed Bank of America Corp. to show what measures it could take if conditions worsen for the Charlotte, N.C., lender, according to people familiar with the situation.

U.S. regulators have pushed Bank of America Corp. to show what measures it could take if conditions worsen for the Charlotte, N.C., lender, according to people familiar with the situation. Read more...

More Americans at Risk of Foreclosure

The number of Americans at risk of foreclosure is rising, reflecting the U.S. economy’s continued struggles.

The Mortgage Bankers Association said Monday that 8.44 percent of homeowners missed at least one mortgage payment in the April-June quarter. That figure, which is adjusted for seasonal factors, rose 0.12 percentage point from the January-March period. Read more...

New York AG Kicked Off Foreclosure Probe Panel

Iowa Attorney General Tom Miller said late yesterday that his New York counterpart, Eric Schneiderman, had been removed from the executive committee working on a multistate foreclosure probe – and potential settlement – with U.S. banks.

$275 Billion Mortgage Rescue Will Stem Foreclosure Fallout, Democrats Say

Newsflash

Monday, 02 March 2009 00:00

Republicans, however, who spoke with CNSNews.com, said the president’s mortgage plan is unnecessary and creates incentives to borrow and lend irresponsibly.

President Obama unveiled his $275-billion Homeowner Affordability and Stability Plan on Feb. 24. The White House claims the plan will help between 7 and 9 million homeowners, at risk of foreclosure, to refinance or restructure their mortgages.

The plan includes $75 billion of financial incentives for lenders to renegotiate mortgages and thereby help prevent foreclosures.

This subset of the overall plan, called the “Homeowner Stability Initiative,” according to the Treasury Department, “has a simple goal: reduce the amount homeowners owe per month to sustainable levels,” to help “those who commit to make reasonable monthly mortgage payments to stay in their homes – providing families with security and neighborhoods with stability.”

Funds for the $75-billion portion of the plan will come out of the $700-billion Troubled Asset Relief Program (TARP), signed into law last fall.

“If your neighbor’s house caught fire, would you want the fire department to put it out?” Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, told CNSNews.com.

“Suppose your neighbor was careless and kicked over a heater or smoked in bed and his house caught fire. Should you have to pay the fire department to put out your neighbor’s house? Yes, because otherwise your house will burn down,” Frank added.

Frank explained that foreclosures do not affect just the homeowner involved.

“The thing about foreclosures is they cause concentric circles of damage,” said Frank. “First to the individual being foreclosed, then to the whole neighborhood, then it depresses property prices in the immediate neighborhood and elsewhere.”

But Rep. Jeb Hensarling (R-Texas) told CNSNews.com that Frank’s analysis is inaccurate.

“It is simply not accurate,” Hensarling said. “There are a huge number of Americans he is trying to help – by hurting their neighbor.

“He is trying to help people — and I am not saying he is doing this by design – but he is helping people who engaged in mortgage fraud, which ran rampant in the last decade,” said Hensarling.

“He will end up helping people who turned their homes into personal ATMs while their neighbors were taking on second jobs to pay their mortgages. These other people were out buying new bass boats, pick-up trucks and vacations to Vegas,” he said.

Rep. Paul Ryan (R-Wis.), ranking Republican member of the House Committee on the Budget, also said that the Obama plan would create the wrong kinds of incentives.

“My fear is that we are going to create a moral hazard,” said Ryan. “The question is, ‘Are we setting up a system of moral hazard with an incentive for reckless borrowing and spending?’ That’s what I am concerned about.”

But Rep. John Lewis (D-Ga.) argued that beyond just helping to strengthen the economy, the taxpayer money going to pay for people’s mortgages is an example of Americans sharing resources.

“The president made it very clear that the people who are in a bind – that the government should intervene and help them,” said Lewis. “We are all in this thing together. When one of us hurts, we all hurt.

“The American people are sharing people. We have to look out of the common good,” said Lewis. “The great majority of people want to help their neighbor.”

Sen. Robert Casey (D-Pa.) said that the president’s plan is necessary to avert a deeper economic crisis.

“If we don’t tackle this problem, we are all going to be in worse shape than we are right now,” Casey told CNSNews.com. “If we don’t tackle it now, the next wave of it over the next year or two will be as bad, if not worse. We will have millions and millions of foreclosures if we don’t tackle this now.

“I realize there is some skepticism and some frustration,” said Casey. “But I believe a lot of Americans know we have to tackle this problem.”

But Rep. Eric Cantor (R-Va.), the Republican whip, also took exception to Frank’s analysis.

“I don’t think that’s a healthy analogy,” said Cantor referring to Frank’s ‘fire department’ scenario. “This situation has developed in part because of individuals who got into transactions they couldn’t afford.”

But in his speech on Tuesday, Obama said that his plan would help “responsible” families facing foreclosure.

“We have launched a housing plan that will help responsible families facing the threat of foreclosure lower their monthly payments and refinance their mortgages,” said Obama. “It's a plan that won't help speculators or that neighbor down the street who bought a house he could never hope to afford. But it will help millions of Americans who are struggling with declining home values.”