Housing Rescue Bill Signed By Bush 7/30/2008

[Sarge]

Your concept of "responsiblity" doesn't apply here. There are many that WANT to "suffer" a foreclosure because frankly 3 years from now they will be better off than those doing the right thing. These moves are to protect homeowners.

No, this move it to protect IDIOTS that bought more then they could afford. They should be banned from being able to declare bankruptcy and have their wages garnished to pay what they promised they would pay

[Larry]

He can go to jail for all I care. So can the rest of them. But Stevans at least gave up his committee spots. Jefferson is still on his.

Integrity eh?

Actually Jefferson was stripped of his committee seats years ago. He's on one, the least important committee in the Senate, because Senate rules state that all Senators must be on at least one committee.

Happened years ago, which means that you've known about it for years. But you never let reality stand in the way of you throwing out a smear, do you?

Must be that passion for integrity you have.

[Destino]

No, this move it to protect IDIOTS that bought more then they could afford. They should be banned from being able to declare bankruptcy and have their wages garnished to pay what they promised they would pay

A contract is a contract Sarge. That contract states that the bank can foreclose if they can't pay. Problem is the banks don't want to anymore. They have too many homes on their hands that are costing them a lot of money. If you think this bill is to protect people that bought too much house you're a dreamer.

I'll say it again and see if you can figure it out on your own: Problem is the banks don't want to anymore. They have too many homes on their hands that are costing them a lot of money.

Tell me again why we are seeing this bailout? Think real hard.

The bottom line however is that less inventory and a blunting of the next foreclosure wave helps current homeowner's that are not in danger of losing their homes by protecting their equity somewhat. The people that have already lost their homes are already on the clock for when they can buy again. Completely removed from the game.

[Fergasun]

The mis-information in this thread is horrendous. I've been reading way too much about the housing crash and economic blogs recently.

- This bill was not written by lawmakers but initially written by mortgage association and housing lobbyists.

- Both parties can be blamed for it. Republicans in the Senate put up a weak effort against it, those in the House voted 3-1 against it. However; Bush and Paulsen pushed heavily for the bill. Specifically Paulsen wanted *blank check* authority to print Treasury money to back the GSEs. However, Congress only gave him up to the $800B limit and he promised not to use it... (yeah right!). I don't understand where this bill could end up costing taxpayers as $5T, but some lawmakers were throwing that number around.

- There are some good measures in the bill as far as GSE reform, but it's been porked up to be I think an overall bill. These measures could've been passed at any time in the past 5 years but Congress waited until "the world was crying out for a solution" and got this bill done.

- The worst part is that this will not stop the house value deflation crises, as the root of the problem is house value inflation. This will surely hurt the dollar in the long run as there are more write-downs from the GSEs.

This is also free from a "free market" bill, and its clear that both Republicans and Democrats are in the pockets of banks... although it won't help... the banks are going to fail because no one is going to be enticed to buy houses at their over-priced values.

[SkinsHokieFan]

This is also free from a "free market" bill, and its clear that both Republicans and Democrats are in the pockets of banks... although it won't help... the banks are going to fail because no one is going to be enticed to buy houses at their over-priced values.

Bingo, and economic activity will stall as nobody is putting up anything on the market and nobody is buying anything on the market. This will then perculate to just about anything that has anything to do with housing, including service and construction industries and local property taxes.

The incentive will be to do nothing and survive

[ChocolateCitySkin]

^^Right but housing prices will natural correct themselves over time -- some people are just going to be stuck in their homes longer than they want. Which is reasonable! When you buy a home you're not supposed to expect sell it in the next year anyways!

[LegionOfDoom]

^^Right but housing prices will natural correct themselves over time -- some people are just going to be stuck in their homes longer than they want. Which is reasonable! When you buy a home you're not supposed to expect sell it in the next year anyways!

I got it....but not every scenario fits that.

What if someone has medical bills that forces them to sell before foreclosure. Death in family that causes a need for a sell.

These situations will cause someone to sell. But those over valued homes with the rug pulled from under will cause problems when someone needs to sell.

Next thing will be foreclosure and take the financial hit. For some 100K+ is reality.

The housing market should not be the stock market where it can ruin lives for no reason to the owner. They can't help it that Lenders and appraisers were in bed together.

[Sarge]

A contract is a contract Sarge. That contract states that the bank can foreclose if they can't pay. Problem is the banks don't want to anymore. They have too many homes on their hands that are costing them a lot of money. If you think this bill is to protect people that bought too much house you're a dreamer.

I'll say it again and see if you can figure it out on your own: Problem is the banks don't want to anymore. They have too many homes on their hands that are costing them a lot of money.

Tell me again why we are seeing this bailout? Think real hard.

The bottom line however is that less inventory and a blunting of the next foreclosure wave helps current homeowner's that are not in danger of losing their homes by protecting their equity somewhat. The people that have already lost their homes are already on the clock for when they can buy again. Completely removed from the game.

You don't have to foreclose. Like I said, garnish their wages. Or is that too mean and un-fair?

[SkinsHokieFan]

^^Right but housing prices will natural correct themselves over time -- some people are just going to be stuck in their homes longer than they want. Which is reasonable! When you buy a home you're not supposed to expect sell it in the next year anyways!

True. The thing is, when this all hashes itself out, A) will the dollar be worth much more then the rupee, will anyone have any cash at all and C) will anyone be able to get a loan at all?

Having economic activity stall will be a disaster. And for this decade, economic activity has been based on housing

[Ellis]

True. The thing is, when this all hashes itself out, A) will the dollar be worth much more then the rupee, will anyone have any cash at all and C) will anyone be able to get a loan at all?

Having economic activity stall will be a disaster. And for this decade, economic activity has been based on housing

A) I know the market fluctuates a lot, but one bright spot is that the dollar gained $0.05 against the euro in the last week. I know that's only 5 cents and it doesn't seem like much... but in market terms, it's a lot. Also... some news of european banks coming under similar crises as American banks is starting to trickle into the media and blogs. And... as Oil comes down, the dollar has shown some strengthening. Also... China has a hangover coming in the future based on their sudden growth. All great things (as well as tragedies) eventually come to an end. Ya just gotta ride it out and hope that we as a country are making wise decisions fo rthe future.

I don't see why we wouldn't have cash. ?? Can you elaborate on what you're referrring to? I can see that perhaps the buying power of that cash will becoming weaker though.

C) Yes. But at what interest rate and... how much do ya have to put up front? LOL! But on a serious note... my concern on loans isn't really about housing in the future but on student loans in the future. A student loan has no value whereas a house is a physical structure that in a default/death of lendee can still have value to the bank.

[Ellis]

And what really pisses me off about the bail out is... of the millions of foreclosures, how many are ARM loans? How many are "primary residence" loans? How many are to non-US citizens legally (or illegally) here? That's the big questions.

For instance, here's a story... In Annapolis, there is a company called Annapolis Paint Company. The owner owns 50 (FIFTY!!!!) houses throughout Anne Arundel County, MD. The owner hired dozens of illegal immigrants. The business as well as 15 of the houses were raided by Immigration Agents a few weeks ago. Dozens of illegals were arrested. The owner relied on their income from renting those houses to pay mortgages. I understand that since the houses are not "primary residences", they don't fall under the bail out rules to be saved... but look at the problem this guy has created for the lenders if he can't pay the mortgage on these properties. It is shameful acts such as this that put strain on the financial lending system too. It's not just ARM's that are crippling the banks/lendee's.

Also... the rate of foreclosures in America historically stays at a constant 4.6%. (Meaning 4.6% of home loans are currently in foreclosure) ...Right now, it's at 6.2% and the majority of foreclosures are located in southern California, southern Arizona, southern New Mexico and southern Florida (predominately Miami area). What do all of them have in common? 3 areas border Mexico and southern Florida is the hub f illegal immigration from the Carribbean. And let's not forget that a fair percentage of people retire to FL and... well... retired people die eventually. How many of those retired people had mortgage plans that paid of the loan in the event of death? Furthermore, Miami FL's problem is people buying second homes (condo's) thinking they could sell them as the housing bubble grew. They put them in ARM's thinking they'd flip em fast. Problem is... a couple thousand people had the same idea at the same time. Boo hoo... I don't feel sorry for them.

I'm not trying to rag on illegal immigrants... but in the tough economic times we're in, new construction of houses are down, gas prices have forced people to avoid restaurants, home improvement is down, people are doing their own yard work and people are taking stay-cations among many other things to save money. OBVIOUSLY, this behavior has affected illegal immigrants. I have a feeling many of these foreclosures may have a lot to do with that. Because let's remember... historically, America stays at about a 4.6% foreclosure rate in any given year and we're currently at 6.2%. It's barely a 2% rise.

[Larry]

Because let's remember... historically, America stays at about a 4.6% foreclosure rate in any given year and we're currently at 6.2%. It's barely a 2% rise.

Actually, that's a 35% rise.

[Forehead]

I hate to hijack, but I need to ask this just because I really haven't studied or paid much attention to the housing crisis.

I bought a townhouse (primary residence) about two years ago for around $275,000. Currently, similar houses in the area are going for around $200,000, maybe a little more. My rate is fixed, my wife and I don't have any problems paying the mortgage, and we're planning on living here for another 6-8 years, at least. Is there anything in this entire bill that concerns us at the moment, or am I in a good position to ride this out? I know this may seem pretty ignorant, but like I said, I always assumed I was in a pretty safe position (besides the lost equity) and I haven't really paid any attention at all.

[SkinsHokieFan]

I hate to hijack, but I need to ask this just because I really haven't studied or paid much attention to the housing crisis.

I bought a townhouse (primary residence) about two years ago for around $275,000. Currently, similar houses in the area are going for around $200,000, maybe a little more. My rate is fixed, my wife and I don't have any problems paying the mortgage, and we're planning on living here for another 6-8 years, at least. Is there anything in this entire bill that concerns us at the moment, or am I in a good position to ride this out? I know this may seem pretty ignorant, but like I said, I always assumed I was in a pretty safe position (besides the lost equity) and I haven't really paid any attention at all.

With a fixed loan and your income you are in good shape

Now the only concern would be if you and or your wife lose your job and you can no longer pay that mortgage

[SkinsHokieFan]

A) I know the market fluctuates a lot, but one bright spot is that the dollar gained $0.05 against the euro in the last week. I know that's only 5 cents and it doesn't seem like much... but in market terms, it's a lot. Also... some news of european banks coming under similar crises as American banks is starting to trickle into the media and blogs. And... as Oil comes down, the dollar has shown some strengthening. Also... China has a hangover coming in the future based on their sudden growth. All great things (as well as tragedies) eventually come to an end. Ya just gotta ride it out and hope that we as a country are making wise decisions fo rthe future.

Right now the Fed has put itself in a pretty good box. Raise interest rates to save the currencey but crush the economy, or keep interest rates low and hope to God the economy will grow. Based on this bill, it looks like the plan is to keep devaluing the dollar

I don't see why we wouldn't have cash. ?? Can you elaborate on what you're referrring to? I can see that perhaps the buying power of that cash will becoming weaker though.

Simple, comidity prices and buying power. I should have been more specific and said disposable cash

[nyskinsfan56]

I hate to hijack, but I need to ask this just because I really haven't studied or paid much attention to the housing crisis.

I bought a townhouse (primary residence) about two years ago for around $275,000. Currently, similar houses in the area are going for around $200,000, maybe a little more. My rate is fixed, my wife and I don't have any problems paying the mortgage, and we're planning on living here for another 6-8 years, at least. Is there anything in this entire bill that concerns us at the moment, or am I in a good position to ride this out? I know this may seem pretty ignorant, but like I said, I always assumed I was in a pretty safe position (besides the lost equity) and I haven't really paid any attention at all.

Nothing in particular really in the bill itself. 6-8 years you may be able to sell for at least what you paid...maybe a little more...maybe a little less. I wouldn't be looking to strike it rich like a lot of these stories you hear from people...doesn't seem like that's what you were looking for though from your post.

[The 12th Commandment]

Also... the rate of foreclosures in America historically stays at a constant 4.6%. (Meaning 4.6% of home loans are currently in foreclosure) ...Right now, it's at 6.2% and the majority of foreclosures are located in southern California, southern Arizona, southern New Mexico and southern Florida (predominately Miami area). What do all of them have in common? 3 areas border Mexico and southern Florida is the hub f illegal immigration from the Carribbean.

I live in the only real city in southern New Mexico 40 miles north of the border. I've worked in the real estate industry for over 20 years. There is no large problem with foreclosures here in fact real estate values are still increasing for all types of properties excepting the McMansions that are bought by people who used to sell in the areas that are a problem now (CA, NV, back east). My townhouse has gone up about 10% in the last year. How did those nasty illegals let that happen? :doh:

How much of the rest of your post is made up bull****?

[Fergasun]

I pretty much agree with SkinsHokieFan as far as housing driving our economy. The slow down in housing has just started to manifest itself in retail. I think we are going to experience what Japan has been experiencing since the 90s... sideways economy.

Part of the problem in Europe is the fact that the European Central Bank raised rates recently. It's smart monetary policy but the whole world is grappling with the same problem of over-valued housing markets. I think that's one of the reasons the dollar gained against the Euro.

But my goodness, I'm going to start parking more money in gold or oil pretty soon. I actually think buying a house isn't a bad idea if you know you're going to be in the same area ~ 10 years and you can put 20% down.... but at the same time you have to pray you or your spouse don't loes your job... which is a bit dicey.

KAOSkins,

You're right that Las Cruces probably isn't experiencing much bust but they didn't have much boom either.

[The 12th Commandment]

KAOSkins,

You're right that Las Cruces probably isn't experiencing much bust but they didn't have much boom either.

That would be correct sir. Illegals have never influenced our housing market one way or the other here, except possibly for the creation of colonias. Illegal developments without adequate utilities. They don't happen anymore. We generally see a much smaller rate of appreciation, though it's there, but conversely we don't see the busts either. There's a relatively high rate of growth but current building is keeping pace rather than over doing it for the most part. Where there's a problem with the lending market is in construction loans. The short term loans builders use to finance their work. Many built high dollar (for here) spec homes and the market for tham has dried up somewhat. That wouldn't be reflected in the foreclosure numbers.

[Forehead]

With a fixed loan and your income you are in good shape

Now the only concern would be if you and or your wife lose your job and you can no longer pay that mortgage

Okay thanks, I'm just not that up to speed on this stuff.

Nothing in particular really in the bill itself. 6-8 years you may be able to sell for at least what you paid...maybe a little more...maybe a little less. I wouldn't be looking to strike it rich like a lot of these stories you hear from people...doesn't seem like that's what you were looking for though from your post.

Well of course, we would hope to be able to sell it for more than we paid, but it's not like we were in a situation where we were trying to flip it or anything, and we certainly weren't trying to get rich quick. As much interest as we'll wind up paying, I can see how we'll be coming out in the red over the entire transaction. Guess I'm just hoping the market rebounds in a few years.

[Larry]

Somebody posted a chart here, I'd say about six months ago. It showed, historically, the median home price as a percentage of the median income. And what it showed was that the percentage has been unchanged since before the Declaration of Independence. Until, IIR, about 10-20 years ago, when home prices went through the roof compared to income. They like quadrupled.

Wish I could find that chart again. But what I remembered was that if you assume that that historical percentage is some kind of natural law, then it would imply that home prices right now need to fall something like 75% to get back to the historical level.

[Destino]

How many are to non-US citizens legally (or illegally) here? That's the big questions.

Why would you make a distinction between legal immigrants and citizens? Both groups pay the same taxes.

Also... the rate of foreclosures in America historically stays at a constant 4.6%. (Meaning 4.6% of home loans are currently in foreclosure) ...Right now, it's at 6.2%

Check this out:

and the majority of foreclosures are located in southern California, southern Arizona, southern New Mexico and southern Florida (predominately Miami area). What do all of them have in common? 3 areas border Mexico and southern Florida is the hub f illegal immigration from the Carribbean.

Seriously deliquent loans in the 1st Qtr of 2008 (top ten states):

Florida 6.71%

Nevada 6.37%

Michigan 6.01%

Ohio 5.97%

Indiana 5.62%

Mississippi 4.96%

California 4.91%

Rhode Island 4.31%

Illinois 4.23%

Georgia 4.13%

Numbers from www.pmi-us.com (good source for reports of this type)

Also I saw that in 2007 the top metro area hit by foreclosures was detroit, MI.

[DjTj]

historically, America stays at about a 4.6% foreclosure rate in any given year and we're currently at 6.2%. It's barely a 2% rise.

How much is 2% ... about 200,000 homes? With an average value of $100,000? That's $20 billion right there, which isn't a number I would call barely anything.

[LuvtheSkins428]

I can't believe this hasn't been posted yet...

I'm not sure of the small details but essentially, these are a few of the things the bill addesses:

1. If you are upside down in your mortgage in an ARM... meaning u owe more than it is worth... you can now refinance through FHA and get a loan with a fixed rate rather than an ARM. But of course, you still have to pass a credit check that lowers the standards of a passing grade.

2. $4,000 tax credit for single, 1st time home buyers... and $8,000 for couples. Essentially, if you purchased a house between April 9th 2008 through XX 2009, you get a tax credit. So for me, since I bought a house AFTER april 9th, when I claim my taxes for 2008, of my federal taxes paid... I can get up to $4,000 of it back on my return. Booyah. This part of the bill goes further though... if you haven't bought a house yet, you can use that $4K towards the house in closing OR wait and get it in your tax return for 2008 or 2009, depending on when you purchased your home.

There is a bunch of other stuff in the bill too.

http://www.politico.com/news/stories/0708/12166.html

When a detailed explanation of the Bill gets published or blogged, I'll post it asap.

The bill is estimated to help about 400,000 home owners in America.

I'm closing on my house tomorrow and looking forward to tax time . Although I'm not sure I agree on how it's set up to "help" people. It will actually still be up to the banks to rework the mortgages for people, then the government will back the loans. But the banks have to agree first. Although this bill will benefit me greatly, I feel like it's helping the banks much more than the people.

[LuvtheSkins428]

Shot in the Dark ---

What about people who bought a house in the 500's and the appraised value is now in the 300's.

I guess they would be stuck.

My friend bought a very nice house last spring. Now as I drive through his neighborhood I see a bunch of houses foreclosed.

He told me the value of his neighborhood dropped over 100K. He said a house similiar to his is selling for over 120K cheaper now. He is really pissed because he does not think he will get any equity and if he wanted to sell he could never do it without taking an extreme financial hit.

So I guess he is stuck right?

I think it also covers people whose homes have lost value, although I'm not sure what their mortgage status should be, but they should check. This has been a big problem since so many bought homes at overinflated prices.