White House to Buy Foreclosures in Freehold NJ – Lis Pendens
Posted by administrator on February 15, 2009
White House may push to buy bad mortgages
The White House is considering a proposal to head off potentially millions more home foreclosures by using federal funds to buy up at-risk loans and then refinance them with more affordable terms Foreclosures in Freehold NJ – Lis Pendens.
Treasury Secretary Timothy Geithner and other Obama administration officials met Wednesday with a group of top bankers, community groups and financial industry representatives to discuss the Foreclosures in Freehold NJ and Lis Pendens plan.
So far, government efforts to prevent foreclosures have focused on pressing the lending industry to work with at-risk homeowners voluntarily and provide them with more affordable payment terms. But the new proposal signals a shift to a more direct government Foreclosures in Freehold NJ – Lis Pendens approach, according to John Taylor, president of the National Community Reinvestment Coalition, who attended the meeting with Geithner, Housing and Urban Development Secretary Shaun Donovan and other Freehold NJ Foreclosures – Lis Pendens Obama administration officials.
“What they heard from all segments of the industry is nearly universal support for going in and purchasing these loans,” said Taylor.
The proposal is one of several being discussed as the White House completes the details of its comprehensive plan to stabilize the financial system and limit a wave of new foreclosures expected over the next few years. Others include legislation to speed up loan modifications and efforts to make new mortgages more affordable.
Under the proposal, the government would draw on $50 billion in funds already approved for the financial bailout to buy up millions of mortgages at a discount. A $300,000 mortgage on a house Foreclosures in Freehold NJ – Lis Pendens now worth $200,000, for example, might be Freehold NJ Foreclosures – Lis Pendens bought at a 30 percent discount.
The homeowner then would be able to refinance the smaller mortgage with lower monthly payments. The government could then sell the loan back to investors, freeing money to buy more loans.
The new approach could eliminate one of the biggest roadblocks Freehold NJ Foreclosures – Lis Pendens that has stymied the government efforts to buy up so-called “toxic assets” that are clogging the financial system. Trading in these securities — backed by thousands of loans — has all but shut down because banks, investors and potential buyers are unable to predict their future value. But individual loans are much easier to value, making government purchases more practical, according to the plan’s proponents.
Taylor estimates that of the roughly 10 million to 12 million households Freehold NJ Foreclosures – Lis Pendens facing foreclosure over the four years, about 4 million to 5 million would be able to keep their homes. The plan would also help clear distressed mortgages from the financial system and free up more lending, said Taylor.
“These investors have suffered this loss — they just haven’t realized it yet,” he said. “It’s an unrealized loss that the government takes and then converts it into a gain for millions of homeowners.”
White House officials this week stressed the urgency of acting to shore up Foreclosures in Freehold NJ – Lis Pendens the nation’s banking system to avert a potential “catastrophe.” But slowing the pace of foreclosures is essential to reducing the glut of homes on the market and resolving the crisis Freehold NJ Foreclosures – Lis Pendens , according to Columbia University economics professor Christopher Mayer.
“We’ve got to deal with housing,” he said, ”because, look, if housing drops another 20 to 25 percent Foreclosures in Freehold NJ – Lis Pendens, I can promise you a lot more of these mortgages are going bad, and we’re going to have a much bigger problem.”
Some 275,000 foreclosure filings were reported in January Freehold NJ Foreclosures – Lis Pendens — or about one in 466 households — an 18 percent increase over January 2008, according to data released by RealtyTrac Thursday. The pace slowed 10 percent from December, largely because of a temporary freeze on new foreclosure filings by several states and mortgage giants Fannie Mae and Freddie Mac, Freehold NJ Foreclosures – Lis Pendens reported.
On Wednesday, the Office of Thrift Supervision urged lenders under its regulation to suspend foreclosures on owner-occupied homes until the White House completes its mortgage relief program Foreclosures in Freehold NJ – Lis Pendens. As of the third quarter of 2008, the roughly 800 lenders regulated by the office had an outstanding mortgage portfolio of more than a half-trillion dollars.
To date, industry efforts to halt the pace of foreclosures have proved inadequate Freehold NJ Foreclosures – Lis Pendens Freehold NJ Foreclosures – Lis Pendens . In congressional testimony Wednesday, CEOs of the nation’s top banks told of hundreds of thousands of loans modified to date.
But according to the Office of the Comptroller of the Currency, more than half of the 287,755 mortgage workouts in the third quarter of 2008 involved repayment plans that, in many cases, increased the monthly cost of the loan to make up for missed payments Foreclosures in Freehold NJ and Lis Pendens. That’s one reason more than half of borrowers who had worked out new mortgage terms redefault within six months, according to the OCC, which regulates nationally charted banks.
As the housing market has collapsed, roughly one in five homeowners now owe more on their mortgage than their house is worth. That’s created one of the thorniest problems in the debate over foreclosure relief: Who should bear the loss when a mortgage is bigger than a home’s value? Various proposals have been floated, including having the government share some of the loss in return for a stake in the possible appreciation of the home after it’s refinanced.
Until recently, the hardest-hit were borrowers who were sold loans with Foreclosures in Freehold NJ and Lis Pendens low “teaser” interest rates that later reset to unaffordable levels. As the recession has deepened, the rapid pace of job losses has put millions more homeowners at risk.
Submitted by Bill Dalton on February 12, 2009 – 8:47am.
President Obama | login or register to post comments | 732 reads
Another Bold Move By Obama
Submitted by LadyDem on February 12, 2009 – 10:57am.
I am not surprised at President Obama’s brilliant move to support those home owners facing foreclosure. From the beginning I thought Obama had the potential to be an outstanding leader. Freehold NJ Foreclosures – Lis Pendens And after seeing him in action over the past few months, I am convinced historians will rate him as one of our greatest leaders. Easily the best since FDR. Having the government buy up “bad” mortgages is good for America Foreclosures in Freehold NJ and Lis Pendens. It will help stabilize our economy stable by keeping the housing industry viable. And for those who worry about a rising national debt, its not a problem as long as we maintain hope and confidence. I agree with those economists who believe that America’s financial future is strongly influenced by people having enough confidence to keep on spending. Hope is an amazing thing.
White House Push to Buy Bad Mortgages. Great Idea…but…
Submitted by Prof Samuel D B… on February 12, 2009 – 11:23am.
Geithner’s Plan: Lowering the Default Risk will Lower the Loss Potential
Treasury Secretary Geithner’s plan is to directly or indirectly have the US Taxpayers bear the loss Foreclosures in Freehold NJ and Lis Pendens on the troubled assets that have been clogging the balance sheets of the banking community. I would like to suggest an approach that will mitigate the expected losses on the “Toxic” Mortgages which are the underlying assets of these troubled assets. The key to a solution of this crisis is the Borrower. We need to enhance his ability to avoid default and make the monthly mortgages payment.
The risk of default is always considered in the determination of asset value. Freehold NJ Foreclosures Lis Pendens Geithner’s plan may be enhanced with the addition of a program that will lower the risk of loss. Foreclosures in Freehold NJ and Lis Pendens This program will function similar to the safe driving education courses that high school students take in order to lower their auto insurance premiums. A program of Financial Guidance will lower the rate of failure and thereby lower the loss potential. In fact, the program may actually turn this crisis all- around by increasing the valuations of the “troubled assets”.
We should acknowledge the simple fact that the Borrower is the key to the valuation of these mortgages and he requires financial guidance to avoid default or re-default after any loan modification. The Borrower’s financial ignorance contributed to this economic crisis. Without an awareness of how to handle and manage money, we can expect a repeat. This lack of understanding of money is the “2 Ton Elephant in the Room” which it seems we are ignoring. We know it is there, but we don’t know how to deal with it Foreclosures in Freehold NJ and Lis Pendens.
The Borrower is in desperate need of “Financial Guidance” in this complex economic environment that requires “informed” financial decision-making. The Subprime Mortgage Crisis, out-of-control consumer spending and credit card usage, and the spike in foreclosures and bankruptcies provide evidence of that fact. Freehold NJ Foreclosures Lis Pendens
We must develop a program of “Immediate and Specific Financial Guidance” that will help the Borrower “naturally” be able to make the monthly mortgage payment. This program is NOT the so-called Financial Literacy initiative that simply disseminates “information” and takes forever to complete, but rather it is a program that will help the Borrower “understand” how to manage money in the shortest possible time and avoid the pitfalls that have previously caused financial distress Foreclosures in Freehold NJ and Lis Pendens.
As the Borrower is successfully guided to avoid default, the financial and housing markets will respond favorably. The result will be a reversal of the downward trend in the valuation of the “troubled assets”.
If we are successful, we can turn this crisis “all around” and Foreclosures in Freehold NJ and Lis Pendens stimulate the economy “naturally” rather than by “bailout” which does not guarantee success.
Instead of the expected losses, the US government (taxpayers) will benefit from the unexpected gains that will result as these investments grow in value.
Foreclosures in Freehold NJ and Lis Pendens
Professor of Accounting & Taxation
Mr. Bornstein’s plan has merit. Namely, the reduced cost to taxpayers. But he makes some assumptions which may not be correct. Bornstein refers to “financial ignorance” on the part of borrowers as one of the reasons the housing market collasped. He recommends “financial guidance” as the fix. I think these borrowers suffer not so much from “financial ignorance” as they do from a sense of entitlement. Freehold NJ Foreclosures Lis Pendens Many people in this country seem to think a high standard of living and home ownership is a right, and doesn’t have to be earned the old fashioned way. We want it all, and we want it now – knowing full well our ability to pay is suspect. How can we change this attitude of entitlement? Certainly not with financial guidance training. I’m thinking this will require some strong medicine – financial pain and suffering.
Prof. Bornstein…
Foreclosures in Freehold NJ and Lis Pendens
Thank you for offering an intelligent suggestion with regard to the economic crisis we face.
Embedded within your interesting plan is the notion that ultimately we’ve got to get back to holding the borrower accountable for his/her actions.
Your plan is to use education as a means of assisting these people to understand how to manage their money.
I like the notion of that…however I am concerned by two aspects.
First, the idea that the crisis we now suffer is the result of ignorance…lack of knowledge. I contend it was more than that. It was greed. It was character flaws that fail to register lies on a mortagage application is wrong.
All the education in the world won’t effect character flaws that are wider than the Grand Canyon.
Second, if you’ve been following the discussion about the Freehold NJ Foreclosures Lis Pendens stimulus package, many of us are furious about the lack of transparency and most importantly accountability associated with this package. TARP I was a disaster. And many of us feel the rest of the package may be the same.
I beieve that is setting up a real economic crisis from which we will not survive. I see this as a true and immediate threat to the American way of life that exceeds Al Queda’s fondest hopes Foreclosures in Freehold NJ and Lis Pendens.
Education is great. But, we need to put accountability into your plan to make it have the teeth necessary to really help.
Again, thanks for offering an intelligent and well thought out option.