Post by unlawflcombatnt on Feb 18, 2009 22:34:09 GMT -6
Obama is giving away another $275 billion of taxpayers' money to bailout out struggling homeowners, along with housing speculators, mortgage fraudsters, investment banks, and the multiple investors who gambled on the housing market never falling. Along with the $75 billion pledged for homeowners, he's also giving Fannie and Freddie another $200 billion taxpayer-funded "liquidity" injection.
from Yahoo/AP:
Obama throws $75 billion lifeline to homeowners
By MARK S. SMITH and ALAN ZIBEL
"President Barack Obama threw a $75 billion lifeline to millions of Americans on the brink of foreclosure Wednesday, declaring an urgent need for drastic action — not only to save their homes but to keep the housing crisis "from wreaking even greater havoc" on the broader national economy.
The lending plan, a full $25 billion bigger than the administration had been suggesting, aims to prevent as many as 9 million homeowners from being evicted and to stabilize housing markets that are at the center of the ever-worsening U.S. recession.
Government support pledged to mortgage giants Fannie Mae and Freddie Mac is being doubled as well, to $400 billion, as part of an effort to encourage them to refinance loans that are "under water" — those in which homes' market values have sunk below the amount the owners still owe....
The new president, focusing closely on the economy, in his first month in office, rolled out the housing program one day after he was in Denver to sign his $787 billion emergency stimulus plan to revive the rest of the economy. And his administration is just now going over fresh requests for multiple billions in bailout cash from ailing automakers.
Wall Street has shown little confidence in the new steps, declining sharply on Tuesday before leveling off after Wednesday's announcement. The Dow Jones industrials rose 3 points for the day....
The administration is loosening refinancing restrictions for many borrowers and providing incentives for lenders in hopes that the two sides will work together to modify loans. But no one is required to participate. The biggest players in the mortgage industry temporarily had halted foreclosures in advance of Obama's plan.
Complicating matters, investors in complex mortgage-linked securities, who make money based on interest payments, could still balk, especially those who hold second mortgages or home equity loans. Their approval would be needed to prevent many foreclosures.
"The obstacles have not gone away," said Bert Ely, a banking industry consultant in Alexandria, Va.
Another cautionary note came from John Courson, chief executive of the Mortgage Bankers Association.
"It seems to offer little help to borrowers whose loan exceeds their property value by more than 5%,"...that requirement would limit the plan's success in some of the hardest-hit areas in California, Florida, Nevada and Arizona and parts of the East Coast.
Indeed, Obama himself said, "This plan will not save every home."
The goal is to lower many endangered homeowners' payments to no more than 31% of their income. But that depends on a high degree of cooperation by lenders who have been increasingly wary of new lending as the crisis has deepened....
Obama said he backs legislation in Congress to allow bankruptcy judges to modify the terms of primary home loans — an idea ardently opposed by the lending industry....
Nationally, Moody's Economy.com says that of the nearly 52 million U.S. homeowners with mortgages, about 13.8 million, or nearly 27%, owe more than their homes are worth after many months of declining prices....
In theory, homeowners facing foreclosure or borrowers owing more on their homes than their mortgages are worth would have more opportunities to refinance their loans so that they have lower monthly payments. Lenders would voluntarily participate in the government programs.
The $75 billion Homeowner Stability Initiative would provide incentives to mortgage lenders to cut monthly payments in an effort to persuade them to help up to 4 million borrowers on the verge of foreclosure. The goal: cut monthly mortgage payments to sustainable levels, using money from the $700 billion financial industry bailout passed by Congress last fall.
Another part would specifically help people with dwellings whose market value has sunk below the principal still owed on the mortgages. Such mortgages have traditionally been almost impossible to refinance. But the White House said its program will help 4 million to 5 million families do just that — if their mortgages are owned or guaranteed by Fannie Mae or Freddie Mac.
To boost confidence, the Treasury Department said it would double its support to the 2 mortgage giants that the government essentially took over last fall.
It said it would absorb up to $200 billion in losses at each company by using money Congress set aside last year and will continue purchasing mortgage-backed securities from them...."
news.yahoo.com/s/ap/20090218/ap_on_go_pr_wh/obama_home_foreclosures
from Yahoo/AP:
Obama throws $75 billion lifeline to homeowners
By MARK S. SMITH and ALAN ZIBEL
"President Barack Obama threw a $75 billion lifeline to millions of Americans on the brink of foreclosure Wednesday, declaring an urgent need for drastic action — not only to save their homes but to keep the housing crisis "from wreaking even greater havoc" on the broader national economy.
The lending plan, a full $25 billion bigger than the administration had been suggesting, aims to prevent as many as 9 million homeowners from being evicted and to stabilize housing markets that are at the center of the ever-worsening U.S. recession.
Government support pledged to mortgage giants Fannie Mae and Freddie Mac is being doubled as well, to $400 billion, as part of an effort to encourage them to refinance loans that are "under water" — those in which homes' market values have sunk below the amount the owners still owe....
The new president, focusing closely on the economy, in his first month in office, rolled out the housing program one day after he was in Denver to sign his $787 billion emergency stimulus plan to revive the rest of the economy. And his administration is just now going over fresh requests for multiple billions in bailout cash from ailing automakers.
Wall Street has shown little confidence in the new steps, declining sharply on Tuesday before leveling off after Wednesday's announcement. The Dow Jones industrials rose 3 points for the day....
The administration is loosening refinancing restrictions for many borrowers and providing incentives for lenders in hopes that the two sides will work together to modify loans. But no one is required to participate. The biggest players in the mortgage industry temporarily had halted foreclosures in advance of Obama's plan.
Complicating matters, investors in complex mortgage-linked securities, who make money based on interest payments, could still balk, especially those who hold second mortgages or home equity loans. Their approval would be needed to prevent many foreclosures.
"The obstacles have not gone away," said Bert Ely, a banking industry consultant in Alexandria, Va.
Another cautionary note came from John Courson, chief executive of the Mortgage Bankers Association.
"It seems to offer little help to borrowers whose loan exceeds their property value by more than 5%,"...that requirement would limit the plan's success in some of the hardest-hit areas in California, Florida, Nevada and Arizona and parts of the East Coast.
Indeed, Obama himself said, "This plan will not save every home."
The goal is to lower many endangered homeowners' payments to no more than 31% of their income. But that depends on a high degree of cooperation by lenders who have been increasingly wary of new lending as the crisis has deepened....
Obama said he backs legislation in Congress to allow bankruptcy judges to modify the terms of primary home loans — an idea ardently opposed by the lending industry....
Nationally, Moody's Economy.com says that of the nearly 52 million U.S. homeowners with mortgages, about 13.8 million, or nearly 27%, owe more than their homes are worth after many months of declining prices....
In theory, homeowners facing foreclosure or borrowers owing more on their homes than their mortgages are worth would have more opportunities to refinance their loans so that they have lower monthly payments. Lenders would voluntarily participate in the government programs.
The $75 billion Homeowner Stability Initiative would provide incentives to mortgage lenders to cut monthly payments in an effort to persuade them to help up to 4 million borrowers on the verge of foreclosure. The goal: cut monthly mortgage payments to sustainable levels, using money from the $700 billion financial industry bailout passed by Congress last fall.
Another part would specifically help people with dwellings whose market value has sunk below the principal still owed on the mortgages. Such mortgages have traditionally been almost impossible to refinance. But the White House said its program will help 4 million to 5 million families do just that — if their mortgages are owned or guaranteed by Fannie Mae or Freddie Mac.
To boost confidence, the Treasury Department said it would double its support to the 2 mortgage giants that the government essentially took over last fall.
It said it would absorb up to $200 billion in losses at each company by using money Congress set aside last year and will continue purchasing mortgage-backed securities from them...."
news.yahoo.com/s/ap/20090218/ap_on_go_pr_wh/obama_home_foreclosures