Letter From My Senator

[Bob G]

I wrote my senators a couple of weeks ago begging them not to support a bailout. I recieved this response today. I don’t know whether to laugh or cry. Disturbing key words in her response:
“Lured”
“predatory subprime lenders”
“abusive loan terms”
“forcing many families into … foreclosure”
“unscrupulous lending practices”

Dear Mr. XXXXXXX:

Thank you for contacting me about subprime mortgages, which are loans that are marketed to borrowers with weak or imperfect credit. I appreciate hearing from you.

In order to purchase a home during the recent housing boom, millions of Americans turned to lenders offering alternative mortgage products such as interest-only and adjustable-rate mortgages. Lured by low interest rates and easy access to credit from predatory subprime lenders, millions of Americans purchased homes they cannot afford.

Though subprime loans have initial monthly payments lower than standard mortgage loans, the payments are structured to increase either suddenly or slowly over time. As a result of recent interest rate hikes coupled with abusive loan terms, payments often grow beyond what borrowers can afford to pay, forcing many families into delinquency or even foreclosure.

The Senate Committee on Banking, Housing and Urban Affairs is currently holding hearings on this matter in an effort to gain more information about unscrupulous lending practices and the current crash of the subprime mortgage market.

Please know that I am monitoring this situation closely and will

keep your views in mind should pertinent legislation come before the Senate.

Again thank you for writing to me.

Barbara Boxer
United States Senator

Please visit my website at http://boxer.senate.gov

[JJGittes]

Couldn’t have been written any better by Teddy K. himself. Go Babs, GOOOOOOOOOOOOO!!!!!!!!!

[Dr Kevin]

Too bad she sent me the same exact letter. And here I was all thinking what a great senator was for writing me a personal letter (or at least her intern).

[Ash Housewares]

Ditto for me; I got that letter verbatim. Still waiting for Feinstein to respond, though. I guess we know who the slacker Senator is.

[waiting hawk]

Wonder what she will write after we send a link to this post?

[Artifact]

Ditto on receiving the exact same form letter response – I rarely feel compelled to write to my senator’s and congressmen because I really believe that not one of them, regardless of party, gives one rats behind about any of their constitutents who are not (a) big donors or (b)highly influential. Getting a nice political speach writer style form letter response does not do much to change my opinion.

Better to just not respond at all like Feinstein!

[meadandale]

“Poor lenders were taken advantage of by greedy lenders”

That’s the gist of what I get from her letter.

I disagree. I knew what an ARM was when I bought my house–I figured I ought to educate myself before making the largest investment of my life so I bought a couple of books (including the Dummy Guide to buying a House). I decided that the risk of rising interest rates wasn’t one that I was willing to take so I opted for a fixed 30 yr loan instead of having to fret over refinancing in a few years at potentially higher rates.

If these people didn’t know what they were signing, they have noone to blame but themselves.

This just further proves why I’ve never voted for Boxer or Feinstein and will continue to try and vote them out of office. I don’t support the nanny state.

[Bugs]

The press approaches this subject with the depth of a 9th grade textbook. The politicians are coasting on those general themes under the (correct) assumption that the majority of the electorate has an equally shallow grasp of the subject. It’s about the votes and nothing but the votes.

[Anonymous]

Babs, baby. You go girl. Make sure that you fashion a bailout that bails out the borrowers so that the poor suffering lenders get bailed out in the process. And make sure that the fix is either 1) financed by the taxpayer’s directly or 2) financed indirectly on the taxpayer’s back through more inflation produced by printing even more money.

As a borrower who is current on his mortgage, who didn’t get into trouble with a “come on” loan, who isn’t going to get a bailout for anything, I’m going to really resent the fact that some lending institution is going to be able to avoid liquidation (at least temporarily) so even higher executive salaries can get paid out (at least temporarily).

[kev374]

Today on CNN:

Subprime Fix

[barnaby33]

I got the same form letter response. It did not make me feel any better either. There are alot of victim words in her response. Feinstein hasn’t responded yet.

Josh

[meadandale]

@kev

Wow, that’s just great. All the benefit of an ARM (lower payments) and none of the risk (not able to refinance at reasonable rates when the ARM adjusts).

Looks like I should have gone with the ARM instead of the 30 year fixed. I would have saved a bunch of cash.

Of course who knew that Nanny Sam was going to step in?

[sdrebear]

Some of this “Subprime Fix” stuff is pretty funny.

I like the last line of that article.

And many borrowers have already demonstrated their credit worthiness by making two or three years of payments during the initial, fixed part of the loan. It’s only when the loan resets at much higher rates that many of them fail to make payments.

Ummmm… Yeah, they’re all so “credit worthy” by paying “teaser rates” that are set lower than prevailing rents!! Ohhhh, they were such great “owners” there for a while!

What a joke.

What’s even funnier is that they actually believe these people can even AFFORD a fixed rate loan at 6.75% (or any percent really). A fixed rate 30 year loan at that rate is probably just as large a payment shock as their suicide loan was at reset! If these FB’s could have refied to a fixed rate loan, don’t you think they’d have already done that? It’s not like they needed Congressional permission to switch loans or something!

[Bugs]

You can tell those borrowers aren’t viable, otherwise they’d be able to refi out of those loans. Extending the teaser rates won’t help them. Alls it will do is cause the lienholders more losses.

[Anonymous]

Yep, I got the same canned response. On the up side, someone pointed this out on Mish’s blog – from Marketwatch.

Not that it can’t be done, but at least she is making it sound like these bail outs won’t be easy or quick to do:

Most of the adjustable-rate mortgages taken out in the past few years can’t be easily rewritten, Bair said. About three-fourths of the $600 billion in subprime ARMs taken out in 2006 have been securitized, or sold in the secondary market, which means that neither the servicer of the loan nor the original lender can easily negotiate with the borrower to change the terms of the loan, she testified.

[Author]

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