Bush Plans Response to Subprime Crisis

[LA_Renter]

And away we gooo!!!

By Deborah Solomon
Word Count: 835
WASHINGTON — President Bush, looking for ways to respond to the subprime mortgage crisis, will outline a series of policy changes and recommendations Friday to help borrowers avoid default and stay in their homes, senior administration officials said.

Among the most tangible moves will be an administrative change to allow the Federal Housing Administration, which insures mortgages for low- and middle-income borrowers, to guarantee loans for delinquent borrowers. The change is intended to help borrowers who are at least 90 days behind in payments but still living in their homes avoid foreclosure; the guarantees help homeowners by allowing them to …

http://online.wsj.com/article/SB118851742988914064.html?mod=hps_us_whats_news

[kewp]

I wonder if Dubya understands that the hundreds of thousands of speculators have no interest in holding onto a depreciating asset and are going to toss their keys?

I suspect no.

[Arraya]

“Among the most tangible moves will be an administrative change to allow the Federal Housing Administration, which insures mortgages for low- and middle-income borrowers, to guarantee loans for delinquent borrowers. The change is intended to help borrowers who are at least 90 days behind in payments but still living in their homes avoid foreclosure; the guarantees help homeowners by allowing them to refinance at more favorable rates.

So if I read this correctly. They are modifiying underwriting guidlines to include people that have fallen behind on payments. In other words willing to lend money to people with poor credit on an asset that is depreciating in value with little or no equity at very low rates. Not sure that is a great idea.

Does this appy to those who are upside down in their home?

[lendingbubblecontinues]

Be not afraid.

Fortunately, we all know that EVERY single thing the Bushies have set out to accomplish on behalf of “hard-working Americans” has delivered the complete opposite result. Or, put another way, it has all backfired.

We should all be thankful, then, (with tongue in cheek) that our illustrious leader (who, I am ashamed to say, I voted for twice) is on the job….

Who knows…we may be seeing another “Mission Accomplished” event on the deck of the U.S.S. Midway museum soon, declaring problems with the housing market over in San Diego;)

[mgubnyc1]

this will only slow down the whole process and drag it out.

IMHO how the hell is that “average American” making 65K a year (thanks JC) going to come up with a plan to pay back 450K or even in some cases 650K????? the only way this family can continue to live in that house is to keep that neg-am-int only loan!!! oh wait,i understand, George lets them live in the house for another 2 years and the tax payers (you and I) can pay the difference, GREAT IDEA

[one_muggle]

I suggest a surge of skilled Realtors (c) be deployed into areas of high foreclosure. After 9 months or so, we can expect a report from the Realtor Brigade, which will be refuted by an army of desk jockey political appointees that have never bought or sold a home. Nah, that’s just crazy talk.

-one muggle

[SD Realtor]

I am just disgusted. It is exactly what I expected. Soon I will just trade in my dollars for monopoly money.

[Arraya]

Yes and in usual Bushie fashion will probably appoint somebody like Charles Keating to head a committee to spearhead the problem…

[TheBreeze]

From the article:

“The Bush administration has been pushing Congress to enact overhauls that would eliminate the required 3% down payment and raise the size of the loans the FHA can insure to as much as $417,000 from $362,790. Senate Banking Committee Chairman Christopher Dodd (D., Conn.) said recently that FHA reform will be among his priorities when Congress returns from its August recess, and a bill is expected to head to the full House this fall.”

… and this POS calls himself a Republican? I wonder what goes on in his little pee-brain? Bush is a danger to capitalism, free markets, democracy, the United States, and the entire world.

[lostkitty]

Impeach him.

[CharlieG]

All of this “help” is based on the idea that people buying from say 2001-2005 were innocent victims.

These buyers screwed me…and a lot of financially responsible readers here, by coming to the auction block with money they didn’t have, and bidding up the prices to insane levels.

Thanks to these bozos, I didn’t buy a house and was forced to sit on the sidelines watching prices go even higher. And even though prices are down to 2004 levels, I wonder if they can roll back to 2000 or so levels and be affordable again–without taking the economy down too.

[JES]

This makes me absolutely sick! What ever happened to taking responsibility for your actions? I can only hope that the ‘reforms’ he is planning to announce will cause it to become even harder to get loans, even if he will also announce tax breaks etc. In the long run, if less people are able to qualify, programs have more stringent rules etc., the bubble should continue to deflate.

[joebaduba]

Shrub is worried about his legacy. If this thing leads to a full fledged recession (or worse) in the next year as the resets roll on, that’s what will be remembered as his economic legacy. I really doubt he cares whether people lose their houses or not.

[SHILOH]

Same story –NYT:

How will this change anything in the long run? Even if they guarantee new/revised loans to delinquent borrowers…the interest rate would have to be so low, or term so long —how would the mortgage be profitable for the lender? (Oh I get it, it’s not the lender…it’s the taxpayer) Can the government or lenders really provide enough relief for the coming resets of the next several years? Are those who get into fixed 30 years w/ nothing down able to afford their $450K mortgage on a $60K income?

I think the tax relief necessary, if not completely fair. It’s seems reasonable. Only because of the current sham market values. But that’s probably inequitable for other homeowners, since everyone is not going to get the tax relief….hummmm….

I feel like this puts the thumb on those who have worked hard, saved for a down, etc… It’s pretty much like we have to coddle and baby sit these idiot borrowers.

[joebaduba]

"These two million mortgages, all held by homeowners with credit problems and with homes that are declining in value, are valued at $500 billion to $600 billion."

Haven't we already spent that much in Iraq just stirring up the sh*t?

[Author]

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