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Bush Drops Opposition to Housing BillUser Forum Topic
Submitted by seattle-relo on July 23, 2008 - 6:34am
Bush Drops Opposition to Housing Bill By THE ASSOCIATED PRESS Skip to next paragraph The Bush administration and lawmakers in both parties teamed to negotiate the measure, which pairs Democrats' top priorities -- federal help for homeowners facing foreclosure and $3.9 billion for neighborhoods hit hardest by the housing crisis -- with Republicans' goal of reining in mortgage giants Fannie Mae and Freddie Mac while reassuring financial markets of their stability. Bush had objected to the $3.9 billion provision in the measure, saying that it was aimed at helping bankers and lenders, not homeowners who are in trouble. White House press secretary Dana Perino announced Bush's switch in a telephone conference call with reporters. "We believe this is not the time for a prolonged veto fight but we are confident the president would prevail in one," she said. It hands the Treasury Department the power to extend the government-sponsored mortgage companies an unlimited line of credit and buy an unspecified amount of their stock, if necessary, to prop up Fannie Mae and Freddie Mac, two companies chartered by Congress. The two companies back or own $5 trillion in U.S. mortgages -- nearly half the nation's total. "The positive aspects of the bill are needed now to increase confidence and stability in the housing and financial markets," Perino said. "While we have concerns with other aspects of the bill, it is important that the new authorities are put in place promptly. And so President Bush will accept Secretary (Henry) Paulson's recommendation to sign the bill." She said she expected that the $3.9 billion provision would be included in the final legislation. "With Congress scheduled soon for yet another recess," she said, "the risk of not having a bill until at best the middle of September -- if they even were act then -- is not a risk worth taking in the current environment." Congressional analysts estimated Tuesday that the rescue could cost $25 billion, but predicted there's a better than even chance it won't be needed at all. The bill would let hundreds of thousands of homeowners trapped in mortgages they can't afford on homes that have plummeted in value escape foreclosure by refinancing into more affordable, fixed-rate loans backed by the Federal Housing Administration. Lenders would have to agree to take a substantial loss on the existing loans, and in return, they would walk away with at least some payoff and avoid the often-costly foreclosure process. The plan also creates a new regulator with tighter controls for Fannie Mae and Freddie Mac and modernizes the FHA. It includes about $15 billion in housing tax breaks, including a credit of up to $7,500 for first-time home buyers for people who bought homes between April 9, 2008, and July 1, 2009. It also allows people who don't itemize their taxes to claim a $500-$1,000 deduction on their 2008 property taxes. That chiefly benefits homeowners who have paid off their homes and can't claim a deduction for mortgage interest. And it increases the statutory limit on the national debt by $800 billion, to $10.6 trillion. The White House, which initially denounced the FHA rescue as too burdensome on the government and risky for taxpayers, dropped most of its objections to the measure in recent weeks in search of a swift deal. The urgent request by Paulson to throw Fannie Mae and Freddie Mac a federal lifeline acted as a powerful locomotive for a deal. The bill sets a cap of $625,000 on the loans that Fannie Mae and Freddie Mac may buy and the FHA may insure. It lets them buy and back mortgages up to 15 percent above the median home price in certain areas. Lawmakers abandoned efforts to place conditions on any Fannie and Freddie rescue, but the bill hands the new regulator approval power over the pay packages of executives at the companies regardless of whether the government moves to financially reinforce them. It also counts any federal infusion for the mortgage giants under the debt limit, essentially capping how much the government could spend to stabilize the companies without further approval from Congress. As of Tuesday, the national debt that counts toward the limit stood at about $9.5 trillion, roughly $360 billion below the statutory ceiling. More Articles in Business »Get The Times delivered for less than $1 a day Government Lost Money
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This bill?
http://www.youtube.com/watch?v=-VV6ST1Pmk4
PEOPLE! Write your Senators and Representatives and tell them no!
If you want housing to correct and become affordable again for teachers, firemen, nurses, secretaries, mechanic's and retail managers tell them to stop spending OUR money on people who bought houses they shouldn't have!
https://forms.house.gov/wyr/welcome.shtml
LOL! Don't be so naive. Those congressmen aren't paid by you, they are paid by lobbyists! They also don't care where your money goes, whether it be Iraq...or fraudulent home loans, whatever. They are paid by wall-street to look the other way.
Bush is caving for the very same reasons.
this doesn't seem like it's going to save the housing market. more likely, it's to save the agency bond market. and the cush jobs of the connected gse execs.
underwriting standards have gone up so the gse's still can't buy crap mortgages. the 625 cap sounds impressive, but with strong underwriting, who can afford that? buying and backing mortgages up to 15% above median will help the banks who wrote and cannot sell mbs, but 15% won't cover the some 30% loss already taken. and selling the stuff will cause write downs that were previously avoided.
the hit to taxpayers to save the bond market, the money markets, the ib's and cb's should make certain folks happy. forcing the middle and lower income people share in the burden of bailing out the upper echelons.
personally, this bailout has made my decision for president for me; obama. at least his tax plan puts the burden of the bailouts back on the shoulders of where it belongs.
I am a fool.
In 2006, I was certain that the housing market would crash, spectacularly. So, I did what I thought was the prudent thing: I sold my house (I had taken a lower paying job), pocketed my gains, and decided that I would buy a house again in a few years when their prices fell to sane levels, as I was sure they would.
I invested my money in a money market account. Which is now earning a measly 2.75 percent interest -- thanks to the Fed's interest rate cuts (all done to save Wall Street, not Main Street).
And now the U.S. government is bailing out the speculative lenders and borrowers who created this mess -- all in an attempt to shore up the "housing market," as if bolstering a bubble was the responsibility of taxpayers. As if keeping people in houses they cannot afford is my responsibility as a taxpayer.
So, while I predicted this spectacular crash, I was the greater fool than those who bought ARMs and speculated that housing prices would keep rising and rising forever. I was the greater fool because I failed to realize that politicians would, OF COURSE, intervene -- too late and in the worst way -- in an attempt to mitigate the spectacular implosion of the bubble. I don't know what effect that the government's intervention will do for housing prices, but I'm sure of one thing: taxpayers like myself are now financing the speculators who fed this bubble. And I'm outraged.
Bush is caving for the very same reasons.
Right. So what, we should all look the other way too?
If not, then short of posting comics what do you suggest? And actually the taxes from your paycheck pay their salaries.
Man Im angry.
Hypothetically, lets say a home that sold for 650K in 2006 is selling for 450K in 2009. So lets say I jump on that home and buy it at 450k. A bunch of my neighbors bought in 2006 and were bailed out due to a program like the one mentioned above. Because of a bailout like this, how does it work? Does my neighbor have equity if he sells at anything above his bailout price point (Say he bailed out when the comps hit 450K)? Or is he on the hook for the balance that was "bailed out" by the govt? I would hate to think that people in my neighborhood have equity or no obligation for their stupidity, especially when my tax dollars are bailing them out.
Im angry because Im not exactly sure what this does to the San Diego market I have been patiently waiting out for two years. I want to see another 15% or more and feel its possible in selective areas but am unclear on the effects of programs like these.
PS Padre great comic and Thrifty great comments.
Laughing now is better than the alternative...to blow blood vessel about something we have very little control over. It's way out of out hands.
Most of us here have been warning friends that this meltdown would come. A House worth 200k back in 2001, is worth 800k 4 years later? REALLY?!! BUT, factor in that dubya has ran the virtual dollar printing press for the last 7 years... the US dollar to be only worth HALF as much as it did when Clinton left office....so your 200k house is now worth 400k in 2008 dollars. Welcome to the new world order. The rich get richer and us poor slobs pick up the bill.