New Efforts to Help Struggling Homeowners
http://thedianerehmshow.org/shows/2012-02-07/new-efforts-help-struggling-homeowners
Following the 2008 housing crisis, banks across the country foreclosed on borrowers. To speed up the process, some lenders used fake signatures or didn’t bother to verify the accuracy of loan documents. A pending multi-billion dollar settlement between the banks and 40 states would ban so-called “robo-signing” and require banks to lower principal payments for “underwater” mortgages. Consumer advocates worry the settlement would not go far enough. Business groups say the market would do a better job clearing foreclosed homes. Diane and her guests discuss efforts to help struggling homeowners.
Guests
Brady Dennis
national economics reporter, The Washington Post
Ed Pinto
resident fellow, American Enterprise Institute; former executive vice president and chief credit officer for Fannie Mae
Kathleen Day
spokeswoman, Center for Responsible Lending; ethics teacher at Georgetown University’s graduate program in real estate studies.
Comments
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Does anyone think this is not just another trick to buy votes with money we don't have, yea right the banks are just going to eat the loss. What ever happened to the self regulating system called the free market. One mans failure is another mans opportunity, new to the market home-buyers and perhaps previously foreclosed upon people with I hope good credit and the ability to pay, be able to take advantage of lower home prices. The newly foreclosed upon can regroup and enter the market at a date in the future if they want to, they have no equity in their home anyway and will be given the opportunity to advance in their lives without a worthless debt burden. The market will clean itself up on it's own and home values will start to increase sooner because the inevitable will not be dragged out by constant government meddling. Government assistance= Moral hazard
I lived in and still have family in southern California, an area hugely effected by the real estate boom and bust. I witnessed the unrealistic efforts many people engaged to become a home owner. On the other hand, I have no doubt that some owners followed conservative guidelines and put a 20% downpayment on their house. Some of these home values were cut in half from the peak of 2005-2006. Even if a homebuyer followed perviously standard protocols conerning down payments, these individuals will be underwater and trapped in their home for many years to come. I'm not usually a fan of government intervention, but the current situation isn't helping the overall economic situation.
Welcome to corporate feudalism.
The sub-prime borrowers....the folks who borrowed irresponsibly....they're all gone. They've been gone for a couple of years now. The folks who are up to loosing their homes now are the people who lost their jobs last year and can't make their mortgage payments.
Wall Street/Corporations= Moral Hazard
Teece Bowman wrote>"The sub-prime borrowers....the folks who borrowed irresponsibly....they're all gone. They've been gone for a couple of years now. The folks who are up to loosing their homes now are the people who lost their jobs last year and can't make their mortgage payments."
That is not what this program is about. If the president can be taken at his word. This is about borrowers that our current but underwater with their loans. This is not about principal reduction, which would turn it into a bigger disaster but rather a way to keep people trapped with large amounts of worthless debt. This will hurt the economy and the people involved not help. These measures only offer to re-inflate the housing bubble temporarily for political gain.
Average value of home with “underwater” mortgage $210,300 – Average loan balance $280,000 – Average amount “upside down” $70,000
The number of homes with negative equity rose to 16.2 million in the first quarter from 13.1 million a year earlier.
I think the figures explain themselves why we cannot just give people money and add it to the national dept. These numbers are from late last year and have worsened.
http://bottomline.msnbc.msn.com/_news/2011/11/08/8687925-nearly-29-of-mo...
I fear the land owning classes are waiting for stability, or whatever they call it, so they can buy up all the land of the 'dispossessed' and live in true baronial style while collecting rents from the peons.
Clearing up this problem before the election would mess up the strategy of their Personal Empires. People roaming the streets, looking for food, etc., with no fixed abode, can't vote. So making sure this issue is not solved while 'seeming' to be so unctuous, is good strategy from the Holy See and the Incense Burners and the 'Holier than Thou" class.
STEP ON THEIR TRAINS!!!!
Loan mods were included in the original bailout language but left optional for banks.
The four-year lag allowing banks to seize close to five million homes in the meantime, while they ignored homeowners, is immoral.
Strategic default is the only way out.
There have suppose to have been many changes with banks dealing with homeowners. In reality the banks continue to ignore offers and not process, they assign and reassign people to files which causes them to start over. They also foreclose without notice in the midst of negotiations. ... It just happened to a client of mine.... Everyone of these things happened.
While I hear promises of change, I see no change in the actual process. I am a real estate broker in Orlando, FL
When I bought a house a few years ago, I was approved for $850K, but only borrowed the $200K I knew I could repay taking into account that there was no guarantee my income or investments were guaranteed to stay at their level. I declined multiple offers to refinance and 'get money out of my house' for the same reasons. That's not irresponsible lending. It would be irresponsible borrowing. As consumers, we alone are responsible for our actions. No one was forced to borrow or borrow at certain terms just as no car buyer is required to pay a certain price or buy a luxury vehicle. These are all choices. Now those who acted irresponsibly and lost their homes get money for 'damages' out of this settlement. Obama socialism at it's worst. If the banks commited fraud, they should be penalized. If American consumers acted stupidly, they should not get this windfall economic gain.
'The Government Caused This!!!"
When will we get the big, bad government under control.
Vote the Newt, the lobbyist for the Banks, and the historian of "How to get it done"
This is unpublished history, available to those who can provide the proper 'holy setting' with enough reverence for the rituals of the land owning and acquiring class.
Doesn't the resent requirement of an additional tax on new mortgages help the banks? The new tax is part of the passage of the payroll tax extension.
The Fannie Mae guy's comment..Blame government? What a whiner! It's not a single answer. He takes no responsibility.
What do you know, another Diane Rehm hour with someone from the conservative American Enterprise Institute.
Why don't we just start calling The Diane Rehm Show the Diane Rehm/AEI Round-table?
In Dallas TX in the mid-80s there was a house price bubble. It burst when S&Ls were abolished and RTC came into being. Many couldn't refinance when interest rates declined because they were upside down on their loans. After 10 yrs of home ownership (and making all of my mortgage pymts), I sold my house for less than I had paid for it, and was one of the few sellers that didn't have to bring money to closing because I had put 20% down as was the prudent thing to do (and still is). None of us pissed and whined about lenders taking advantage of us and none of us expected to be bailed out by tax-payers. It would have been beneath us and embarrassing.
I wish the panel would stop referring to these actions as "inappropriate". The right terms are "fraud", "perjury", and "criminal". What is the purpose of a legal system if it cannot enforce it's own tenants? The person that signed the affidavit without proper checks KNEW they were committing perjury. The LAWYERs (i.e. "officers of the court") understand what the consequences of their actions are. At least 100 criminal convictions needs to be part of this settlement agreement.
That's how you restore faith in the system, confidence in the electorate, and justice for all.
"New Efforts to Help Struggling Homeowners " - what a deceptive title for this program. What this is about is letting the banks off the hook for pennies. This scandal is an economic Bhopal (and the banks will try to wriggle out of any accountability, just like the chemical companies did) - people should have to pay dearly for this, and laws should be changed so it can't happen again, but that is certainly not what this is all about.
If the AGs are representing us, as they should, they should reject this deal.
I wish NPR would have people on from Counterpunch to discussi the issues... but as long as they have corporate sponsors and taxpayer funding it will never happen. At present, its all about presenting a unified propaganda message.
http://www.counterpunch.org/2012/02/03/obamas-refinancing-swindle/
http://www.counterpunch.org/2012/01/23/the-next-housing-bailout/
http://www.counterpunch.org/2012/01/13/the-foreclosure-to-rental-screwjob/
Each time something like this happens it reminds me of Enron, all those people got cheated by a corporate cheat and there was never any justice or retribution. Those responsible need to go to jail or this kind of cheating of the american people will continue. Everyone i know has a story. My story is the same as many others My home is not worth what i owe, the bank talked me into refinancing at a lower interest rate but i still owe 119 thousand on a house thats only worth 105 thousand, I am going to need to struggle for the next 10 years at least to stay in my home and pay it down to break even. The refinance only saved me a percentage and a half on my loan but the closing costs added to my debt.
Ed Pinto's claim that government policy is entirely to blame is a transparent and self-serving fabrication. Greed and cynical exploitation,lobbying to remove all restrictions, and the purchasing of the legislators who voted for such lunacy, and then bending the rules that were still left is to blame. The tranching of trash to create fibbed-up Triple A securities out of garbage loans was not a government policy.
Boom buyers paid prices that raised all home prices, including the earlier purchases people brag were "more responsible." Even with the bust these buyers are often somewhat ahead.
The property taxes boom buyers pay greatly and disproportionately enriches their communities. A significant perk for the disdainful pre-boom buyers.
Mr. Pinto's first comment sounded ridiculous to me. Keeping matches in the house does not create pyromaniacs. Government regulations do not create poor and greedy lending practices. Some smaller regional banks maintained their lending standards and values, took less quick profit, and are now in stronger shape than their counterparts.
A really excellent article on the topic: https://dandelionsalad.wordpress.com/2012/02/04/why-the-ags-must-not-set...
"It is a Civil investigation, you say?'
I say, OFF WITH THEIR HEADS!
The class war has already been fought and won by the marketing products purveyers to the Unctuous Class.
The class warfare they fear is the CLAW BACK.
Claw back off the edge of the cliff while Simon Legree is there to step on your toes?
Claw back off the edge when your children are sick and your parents are overwhelmed.
Where are our people, our retinue, to handle these issues. What is wrong with us that we don't have a retinue to handle the 'small stuff' put out by the 'banking product developers,' the people who put tacks in the road, the Hunting Class, for Members only. Follow the RED COATS. Follow the Mitres. Follow the Pied Piper. Follow 'the Party of Lincoln', the seller of indulgences.
Follow. Follow. Follow. Only just Follow. All will be well. All will be sweet. All will be as it should be in our Fairy Tale. We the purveyors of the 'classics.' We, the Oblivious Class, the Masters of the Universe. See our Flag flying on yonder hill. Don't be distracted by what any one else is trying to tell you. They are of the Devil! They quote numbers and will try to show you things they call facts. Just say, 'Get thee back, Satan' Follow the Flag, See the one with the Reptile on it. The Rampant Dragon.
Perhaps some funds could be used from this settlement to develop curriculum in high schools educating students about borrowing, especially mortgages, to arm American consumers with enough knowledge to hopefully avoid many of the situations some folks find themselves in. My Dad always told me that when you borrow, think about what you can really afford before you sign on the dotted line! Caveat emptor!
Melinda Morrell
And what's worse is that it's not like this is FOX News, which everyone expects to pump out pro-bank/corporate propaganda. What makes NPR's kowtowing to corporate agenda so destructive is that everyone thinks they're center-left and thus reasonably balanced, so they take this stuff as a real discussion of the issue, when it's anything but.
“Not only was the decline in [home] prices a clear force driving negative equity, but borrower equity extraction also significantly increased the risk of a negative equity position,” CoreLogic says in a report on its findings. “While only 18% of borrowers with no home equity loans were underwater at the end of the first quarter, 38% of borrowers with home equity loans were in a negative equity position. Over 40% (4.5 million) of all negative equity borrowers have home equity loans.”
This is a unique blog site about the industry that's told from that of a real estate agent. It also a great article on the occupy our homes. Personally as a home owner who did not buy a home, whose mortgage I could not afford, I'm tired of those who did and now feel hard done by in being foreclosed on.
Please check out this link it says what many homeowners think but never gets reported.
http://bit.ly/xSOd0H
Best.
Chris,
A few years back, when I was first starting out, I was granted the opportunity to work on several foreclosure cases. In EVERY case, I witnessed that the banks had violated rules, standards, processes, their own process guidelines, laws, etc. At the worst times possible, the banks could be counted on losing paperwork or take actions only intended to delay the process. Furthermore, time and time again I saw the banks act or negotiate without good faith. The banks caused much of this harm and should be held accountable.
Let's please acknowledge one thing: Millions of people obtained mortgages over the past few decades that would have been better off renting. I sympathize with underwater homeowners, but I am a renter, because I know I have no business mortgaging a house with my finances currently. Let's push renting, instead of buying, for folks who can't actually afford to buy a home. The American dream includes rentals!
@JJackman,
It all BEGAN with government. The tranching, the securitization, the swaps, all of it, were a response to the government policy of pushing banks to make risky loans.
Has it never crossed your mind to ask why this never happened before pressure groups began suing banks to force looser standards over fake controversies like "redlining"?
The government/New York Times narrative you've swallowed is thoroughly wrong and self-serving for those in power.
What we have here is a broken unjust form of capitalism that colludes with corrupt government producing a profoundly unjust system verified by the gap between a small in-group of the rich that can rape and pillage with the best of the robber barons and the rest of us.