President Obama will announce of Wednesday his plan for helping, he may even have the nerve to call it fixing, the housing market. While no one is sure what form it will take when he announces the plan in Mesa, Arizona, many in the media are speculating on it.
Here is MSNBC’s take:
The administration is working on a comprehensive plan to try to halt the ongoing wave of home foreclosures as part of its efforts to stabilize the financial system. The $50 billion package may include a program to buy up distressed mortgages at discount prices, subsidies to help struggling homeowners make their monthly payments and national standards for modifying home loans to more affordable terms.
The foreclosure prevention plan is part of a broader package of measures the administration is putting in place to help the staggering economy. Congress is moving toward final passage of the economic stimulus legislation. The Treasury Department has outlined in broad terms a plan to help stabilize the nation’s financial sector. via msnbc.com.
The Los Angeles Times hints at a 2 part plan:
A congressional Democratic aide said Monday there will be two pieces to Obama’s housing plan. One will involve changes in law that can only be made by Congress — such as empowering bankruptcy judges to restructure mortgages. The other will involve actions Obama can take by executive fiat. via the Baltimore Sun
I have to admit I am scared by entering the foreclosure process into the bankruptcy courts as you then add another cost to mortgages for everyone, but if the package included removing mark to market I think I could swallow it.
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{ 4 comments… read them below or add one }
Wouldn't the cost of going to the bankruptcy judges be offset by your restructured mortgage? I'm no expert, but this is something the Bush Administration failed to do, Barney Frank for one has been screaming to allow bankruptcy judges to restructure as he claims it would ease the burden on homeowners on the brink of foreclosure. Don't know much about how this process works and the cost behind it, but I'm sure Obama is trying to help homeowners, not screw them like the previous administration did by allowing 0% down and approving loans no matter….blame the loan officers and Bank C.E.O.'s, Wall Street on crack…I'm sick of Republican ideology, it has failed miserably. Obama is the sixth President in my lifetime, I've had 3 Republicans and now 3 Democrats, and every Republican has left office with the nation in a recession…fiscally conservative my behind!!
At this point we will take what we can get. I don't agree with letting BK judges restructure mortgages but now we are past the point of arguing that. The Republicans continued the de-regulation with Fannie Mae and Freddie Mac that the Clinton Administration started in the late 90s. This paved the way for 0 down loans and easy approval. I would not point the blame soley on the Republicans for this mess we are in.
I thought it was Phil Graham and the Republican Majority Congress that overturned the regulations?….of course Clinton signed it into effect….but at least it wasn't his brain child…no sir, free market ideology is what got us here today…thank you Mr. Greenspan for following in the footsteps of Ronald Reagan…of course we had a stock market crash in '87 and six straight years of raising taxes after Ronald, but who's counting anyways…lol…actually I bet G.H.W. Bush was counting when he lost his re-election bid in '92 because of those tax hikes…and we all know the mess his kid led us into so let's keep it real….here's an idea, let the market adjust itself, I'll go live in a hooverville for 10 years, at least I'll own my own hut in a prime park district local!
Having Bankruptcy judges do loan mods will encourage more people to file BK. Why doesn't Obama adjust everyone's mortgage to 4% and if someone is behind on their loan and facing foreclosure tack the default amount to the back of the note. This move would be aggressive and would put a lot of borrowers back on track. The issue would be valuation of the property vs principle loan amount.
It will be interesting to see what he unveils
Thanks for the post!!