Bank of American appears to have written the Dodd-Shelby banking bailout bill

[SK in CV]

It is actually 85%. The new loan is 90% of the current appraised value, but the original lender has to pay a 5% in fees, which nets it 85%. Those that have been in the real estate business long enough to remember when FHA insured loans were more common, can attest to what sticklers they are for dotting every i and crossing every t. Faked appraisals will not be common. It will be a small bailout for the lenders (compared to the 60-78% of FMV at foreclosure date that they’re recovering now), and a small bailout for the borrowers. But a larger bailout for the market as a whole. It will remove distressed properties from the market.

But its unlikely to actually have the effect intended. The requirements on the borrower, related to the original loan, will be difficult to qualify for where the original loans were sub-prime and/or no and low doc loans. And yes, the FHA will watch that very carefully too. The program will be a well intended dud.

[Eugene]

I couldn’t find any language about the 85% of market value, but there is some language about insuring up to 90% of the appraised value on page 378.

I seem to remember that new insured mortgages would be up to 90% of FMV, but some of that money goes elsewhere and not to the lender so the maximum _payout_ that the lender can expect is 85%.

This bill makes absolutely no sense. Why would a bank sell a mortgage for 85% of the appraised value of the asociated property when, if the appraisal is accurate, the bank could just foreclose and sell the property for 100% of the appraised value? The only reason I can see to do this is if the appraisal is wildly overvalued.

The choice is:
– 85% of the appraised value NOW
or
– 100% of FMV 9 months from now, less attorney fees and other costs of doing the foreclosure, less realtor fees (probably 6% of FMV), less 9 months worth of interest payments

[Eugene]

I couldn’t find any language about the 85% of market value, but there is some language about insuring up to 90% of the appraised value on page 378.

I seem to remember that new insured mortgages would be up to 90% of FMV, but some of that money goes elsewhere and not to the lender so the maximum _payout_ that the lender can expect is 85%.

This bill makes absolutely no sense. Why would a bank sell a mortgage for 85% of the appraised value of the asociated property when, if the appraisal is accurate, the bank could just foreclose and sell the property for 100% of the appraised value? The only reason I can see to do this is if the appraisal is wildly overvalued.

The choice is:
– 85% of the appraised value NOW
or
– 100% of FMV 9 months from now, less attorney fees and other costs of doing the foreclosure, less realtor fees (probably 6% of FMV), less 9 months worth of interest payments

[Eugene]

I couldn’t find any language about the 85% of market value, but there is some language about insuring up to 90% of the appraised value on page 378.

I seem to remember that new insured mortgages would be up to 90% of FMV, but some of that money goes elsewhere and not to the lender so the maximum _payout_ that the lender can expect is 85%.

This bill makes absolutely no sense. Why would a bank sell a mortgage for 85% of the appraised value of the asociated property when, if the appraisal is accurate, the bank could just foreclose and sell the property for 100% of the appraised value? The only reason I can see to do this is if the appraisal is wildly overvalued.

The choice is:
– 85% of the appraised value NOW
or
– 100% of FMV 9 months from now, less attorney fees and other costs of doing the foreclosure, less realtor fees (probably 6% of FMV), less 9 months worth of interest payments

[Eugene]

I couldn’t find any language about the 85% of market value, but there is some language about insuring up to 90% of the appraised value on page 378.

I seem to remember that new insured mortgages would be up to 90% of FMV, but some of that money goes elsewhere and not to the lender so the maximum _payout_ that the lender can expect is 85%.

This bill makes absolutely no sense. Why would a bank sell a mortgage for 85% of the appraised value of the asociated property when, if the appraisal is accurate, the bank could just foreclose and sell the property for 100% of the appraised value? The only reason I can see to do this is if the appraisal is wildly overvalued.

The choice is:
– 85% of the appraised value NOW
or
– 100% of FMV 9 months from now, less attorney fees and other costs of doing the foreclosure, less realtor fees (probably 6% of FMV), less 9 months worth of interest payments

[Eugene]

I couldn’t find any language about the 85% of market value, but there is some language about insuring up to 90% of the appraised value on page 378.

I seem to remember that new insured mortgages would be up to 90% of FMV, but some of that money goes elsewhere and not to the lender so the maximum _payout_ that the lender can expect is 85%.

This bill makes absolutely no sense. Why would a bank sell a mortgage for 85% of the appraised value of the asociated property when, if the appraisal is accurate, the bank could just foreclose and sell the property for 100% of the appraised value? The only reason I can see to do this is if the appraisal is wildly overvalued.

The choice is:
– 85% of the appraised value NOW
or
– 100% of FMV 9 months from now, less attorney fees and other costs of doing the foreclosure, less realtor fees (probably 6% of FMV), less 9 months worth of interest payments

[Portlock]

Aeceita –

Good point, the escrow period for future US citizens can most certainly be shortened, and the whole process could be made cheaper and more sensitive. In fact, our candidates positions are similar on immigration. Obama voted for the Senate immigration overhaul bill that McCain co-sponsored in 2006:

http://www.npr.org/templates/story/story.php?storyId=91323073

My point is, aside from the op’s original debate in this thread ongoing, there is subjective bashing of Obama occurring for spiteful, partisan reasons. I guarantee it would not be happening if our candidates’ party affiliations were masked, but again, the candidate most willing to cross the aisle and compromise will get my vote. We should all aspire to act diplomatically for the sake of our union, no time better than now. And I know my data-driven, fellow piggs can see the objectivity I’m trying to emphasize here.

[Portlock]

Aeceita –

Good point, the escrow period for future US citizens can most certainly be shortened, and the whole process could be made cheaper and more sensitive. In fact, our candidates positions are similar on immigration. Obama voted for the Senate immigration overhaul bill that McCain co-sponsored in 2006:

http://www.npr.org/templates/story/story.php?storyId=91323073

My point is, aside from the op’s original debate in this thread ongoing, there is subjective bashing of Obama occurring for spiteful, partisan reasons. I guarantee it would not be happening if our candidates’ party affiliations were masked, but again, the candidate most willing to cross the aisle and compromise will get my vote. We should all aspire to act diplomatically for the sake of our union, no time better than now. And I know my data-driven, fellow piggs can see the objectivity I’m trying to emphasize here.

[Portlock]

Aeceita –

Good point, the escrow period for future US citizens can most certainly be shortened, and the whole process could be made cheaper and more sensitive. In fact, our candidates positions are similar on immigration. Obama voted for the Senate immigration overhaul bill that McCain co-sponsored in 2006:

http://www.npr.org/templates/story/story.php?storyId=91323073

My point is, aside from the op’s original debate in this thread ongoing, there is subjective bashing of Obama occurring for spiteful, partisan reasons. I guarantee it would not be happening if our candidates’ party affiliations were masked, but again, the candidate most willing to cross the aisle and compromise will get my vote. We should all aspire to act diplomatically for the sake of our union, no time better than now. And I know my data-driven, fellow piggs can see the objectivity I’m trying to emphasize here.

[Portlock]

Aeceita –

Good point, the escrow period for future US citizens can most certainly be shortened, and the whole process could be made cheaper and more sensitive. In fact, our candidates positions are similar on immigration. Obama voted for the Senate immigration overhaul bill that McCain co-sponsored in 2006:

http://www.npr.org/templates/story/story.php?storyId=91323073

My point is, aside from the op’s original debate in this thread ongoing, there is subjective bashing of Obama occurring for spiteful, partisan reasons. I guarantee it would not be happening if our candidates’ party affiliations were masked, but again, the candidate most willing to cross the aisle and compromise will get my vote. We should all aspire to act diplomatically for the sake of our union, no time better than now. And I know my data-driven, fellow piggs can see the objectivity I’m trying to emphasize here.

[Portlock]

Aeceita –

Good point, the escrow period for future US citizens can most certainly be shortened, and the whole process could be made cheaper and more sensitive. In fact, our candidates positions are similar on immigration. Obama voted for the Senate immigration overhaul bill that McCain co-sponsored in 2006:

http://www.npr.org/templates/story/story.php?storyId=91323073

My point is, aside from the op’s original debate in this thread ongoing, there is subjective bashing of Obama occurring for spiteful, partisan reasons. I guarantee it would not be happening if our candidates’ party affiliations were masked, but again, the candidate most willing to cross the aisle and compromise will get my vote. We should all aspire to act diplomatically for the sake of our union, no time better than now. And I know my data-driven, fellow piggs can see the objectivity I’m trying to emphasize here.

[gandalf]

Thanks for the excellent post, Portlock.

Obama has a sensible approach to energy policy. It’s the central issue of our time. Our energy policy undercuts our foreign policy. Contrast with McCain and the gas tax holiday. Enough said.

Obama is proposing large, local (as in, ‘here in the US’) investments in energy research, infrastructure and green technologies. I support this 100% and believe it will spur the US economy in far more substantive ways than the Bush tax cuts.

Imagine a breakthrough in transportation technology, for example, followed by 5-10 year replacement of the vehicle fleet. The impacts on the broader US economy would be game-changing. Electricity and the grid is the way. Obama will get us there faster than McCain.

The credit mess is bigger than either candidate or party.

[gandalf]

Thanks for the excellent post, Portlock.

Obama has a sensible approach to energy policy. It’s the central issue of our time. Our energy policy undercuts our foreign policy. Contrast with McCain and the gas tax holiday. Enough said.

Obama is proposing large, local (as in, ‘here in the US’) investments in energy research, infrastructure and green technologies. I support this 100% and believe it will spur the US economy in far more substantive ways than the Bush tax cuts.

Imagine a breakthrough in transportation technology, for example, followed by 5-10 year replacement of the vehicle fleet. The impacts on the broader US economy would be game-changing. Electricity and the grid is the way. Obama will get us there faster than McCain.

The credit mess is bigger than either candidate or party.

[gandalf]

Thanks for the excellent post, Portlock.

Obama has a sensible approach to energy policy. It’s the central issue of our time. Our energy policy undercuts our foreign policy. Contrast with McCain and the gas tax holiday. Enough said.

Obama is proposing large, local (as in, ‘here in the US’) investments in energy research, infrastructure and green technologies. I support this 100% and believe it will spur the US economy in far more substantive ways than the Bush tax cuts.

Imagine a breakthrough in transportation technology, for example, followed by 5-10 year replacement of the vehicle fleet. The impacts on the broader US economy would be game-changing. Electricity and the grid is the way. Obama will get us there faster than McCain.

The credit mess is bigger than either candidate or party.

[gandalf]

Thanks for the excellent post, Portlock.

Obama has a sensible approach to energy policy. It’s the central issue of our time. Our energy policy undercuts our foreign policy. Contrast with McCain and the gas tax holiday. Enough said.

Obama is proposing large, local (as in, ‘here in the US’) investments in energy research, infrastructure and green technologies. I support this 100% and believe it will spur the US economy in far more substantive ways than the Bush tax cuts.

Imagine a breakthrough in transportation technology, for example, followed by 5-10 year replacement of the vehicle fleet. The impacts on the broader US economy would be game-changing. Electricity and the grid is the way. Obama will get us there faster than McCain.

The credit mess is bigger than either candidate or party.

[Author]

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