May 3, 2007 at 10:22 PM #8997CoronitaParticipant
Schumer wants aid for subprime borrowers
Democratic Senator wants $300 million to help borrowers avoid foreclosure.
May 3 2007: 2:03 PM EDT
WASHINGTON (Reuters) — Community groups that help subprime borrowers try to save their homes from foreclosure would receive $300 million in aid under legislation introduced by Democratic Senator Charles Schumer Thursday.
The infusion of federal money would help consumer groups reach out to troubled borrowers and, in some cases, provide new financing directly.
Sen. Charles Schumer (D-N.Y.)
The groups that would benefit from the money are in direct contact with delinquent homeowners and guide them through the complicated steps they can take to save their homes, said Sen. Schumer (D-N.Y.), chairman of a Senate subcommittee on housing and sponsor of the legislation.
“They know how to do it. Their role is critical,” he said of the consumer groups that aim to help troubled borrowers.
“We’ve learned that borrowers who are delinquent on their loans are at a distinct disadvantage,” when trying to change the terms of a bad loan, the New York Democrat said.
Companies such as Countrywide Financial (up $0.48 to $37.74, Charts, Fortune 500), Fannie Mae (up $0.88 to $60.70, Charts), Wells Fargo (up $0.12 to $35.81, Charts, Fortune 500) and Wachovia (up $0.23 to $55.60, Charts, Fortune 500) have made loans in the subprime market.
Schumer’s legislation is the first proposal from federal lawmakers aimed at dampening the crisis in the subprime mortgage market that serves borrowers with damaged credit. Top of pageMay 3, 2007 at 11:10 PM #51812CoronitaParticipant
Actually, I also found the following information about him that makes things even more interesting.
- Senate Committee on Finance
- Senate Committee on Banking, Housing, and Urban Affairs
- Senate Committee on the Judiciary
- Senate Committee on Rules and Administration
Still don't think a bailout is possible? You think Senators like Schumer are proposing a bailout to really help out the average Joe????
Doubt it. I wouldn't be surprised that he has ties to banking institutions. Here's the "theory" that I'd piece together:
* Banks know they're up sh!t's creek
* Banks want a bailout, without going public to avoid freaking out the general masses (investors, etc).
* Current government in control (in this case Democrats) don't want to go down in history as the ones that didn't do squat for the people. Also, they have big corp lobbying groups to appease.
* Bank corps and congress/government work out a deal.
* Congress puts bills out in public screaming for bailout/loan reform to win public support for the average otherwise screwed Joe.
* Meanwhile congress structures bailout/load reform geared to protect the Bank corps from going under under the guise of "helping" average Joe.
–> Loan terms will be extended to lower monthly payments, but keep people locked in longer than 30 years (40 or 50 years???)
–> At the same time, loan terms are tightened to make it harder for screwed average Joe to obtain other loan terms.
–> At the same time, perhaps additional legislation/law enforcement will be proposed that makes it harder for average screwed joe to walk away from existing loans. For example, the threat of prosecuting Alt-A borrowers who lied, but will be "forgiven" if they accept the new loan terms.
All for the purpose of stringing out troubled borrowers across years, to avoid 1 shot flood of screwed people. Instead, small groups of screwed people spread out across the years. It also buys banks time for real estate to recover some of the decline so BANKS don't have to bear the brunt.May 4, 2007 at 9:20 AM #51836Cow_tippingParticipant
Sounds plausible … hope that it fails, or better yet, the FB’s reaslise they are screwed even more, by now having to pay the inflated amount at a even more drawn out time frame and appreciation isn’t bailing them out at all … cos inflation = higher interest and that = lower affordability … blah blah blah … so I can sell my house and run …
Cow_tipping.May 4, 2007 at 9:34 AM #51837no_such_realityParticipant
Yeah, I suspect what we’ll see is a loan reform like we just saw credit card and bankruptcy reform.
In the end, they’ll doa bail out, it’ll be a spit in bucket that helps a few out that were not really over extended, just in a stupid option ARM because that’s what made the broker money and can afford the real fixed 30 year rate.
The rest simple, cannot be helped. It isn’t a matter of wanting to or not, it’s a matter of you just can’t make it work. Many are so over-extended that they can’t cover long term market interest charges. There’s no extending around that.May 4, 2007 at 9:55 AM #51839AnonymousGuest
I doubt that $300 million will do much. Actually, I doubt that any bailout will do much. By the time the gov’t gets around to really getting a sizable number of these bailouts really going and getting consumers to know about them, it will be far, far too late.May 4, 2007 at 12:31 PM #51863SD RealtorParticipant
Andy it is not the size of the bailout that counts. It is the fact that govt officials are even considering this makes it so crazy. It should not be done at all. It should not cost any taxpayers money. It should not even be on the table.
SD RealtorMay 4, 2007 at 3:06 PM #51875SHILOHParticipant
I read there is a record 7 trillion in mortgages “out there.”
Could there be 1 trillion in subprime going bad for the next 5 years?
If so, will 300M or $500M thrown occasionally thrown into fix…going to have any real impact?May 4, 2007 at 4:26 PM #51884AnonymousGuest
The gov’t has to try bailouts. Some of the senators’ biggest campaign contributors are the financial institutions that sell all these mortgages on the markets. The senators aren’t working for us; they are working for them.
As annoying as it is to those of us who have been responsible, it shouldn’t be a surprise. Look who really owns Schumer: http://www.opensecrets.org/politicians/contrib.asp?CID=N00001093&cycle=2006May 4, 2007 at 5:13 PM #51886lnilesParticipant
Wow. Nice table. And those are just the “on the record” contributions (yes, I’m a conspiracy theorist but can’t help it since I live in SD).May 4, 2007 at 5:14 PM #51887SD RealtorParticipant
That is not a good enough answer. I agree the politicians are all puppets for the lobbyist. However there are some politicians out there that are not in favor of any bailout.
SD RealtorMay 4, 2007 at 6:22 PM #51890Ash HousewaresParticipant
deletedMay 4, 2007 at 6:28 PM #51892BugsParticipant
We’re still paying for the last bailout.May 5, 2007 at 8:48 AM #519064plexownerParticipant
Politicians will continue to hand out the taxpayer’s money and sell off pieces of our country to the highest bidders until we hold them accountable – they don’t care about us except as pawns to be used as needed
This country was founded on the idea that We The People grant power to the government
We The People have allowed this to become a country where the government is in control and they are granting power to the people
And the power being granted to the people is being reduced everyday
How can we as concerned citizens solve this crisis of leadership in our own country?May 5, 2007 at 8:03 PM #51929lnilesParticipant
By voting responsibly, being aware of the issues, and spending money only at business which share your views (companies have all the lobbying power, consumers make them succeed or fail). Just my $0.02May 6, 2007 at 1:28 PM #51943
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