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Obama proposes $5-10 billion for home refinancing
http://nbcpolitics.msnbc.msn.com/_news/2012/02/01/10289269-obama-proposes-5-10-billion-for-home-refinancing
President Barack Obama on Wednesday called on Congress to approve a $5 billion to $10 billion effort to help U.S. homeowners refinance as part of a wider package of proposals to shore up the depressed housing market.
Obama had sketched out the proposals in his State of the Union address last week, including a tax on banks to pay for the plan that Republicans quickly rejected.
The White House offered more details on Wednesday ahead of a speech by Obama to expand on his initiative, which some Republicans have derided as an election-year ploy.
Nearly 11 million Americans are underwater on their mortgages, meaning they owe more than their homes are worth. Millions more have lost homes to repossession in states that will be up for grabs in 2012.
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"While the government cannot fix the housing market on its own, the president believes that responsible homeowners should not have to sit and wait for the market to hit bottom to get relief," the White House said in a statement.
The White House is seeking to contrast Obama's stance with that of Republican presidential front-runner Mitt Romney, who has said U.S. foreclosures should be allowed to run their course.
The next contest in the state-by-state battle for the Republican nomination is in Nevada, the state with the highest rate of foreclosure filings for the past five years.
The White House said the refinance program would be run by the Federal Housing Administration. The FHA has already been hard hit by rising defaults on mortgages it had insured, and its cash reserves reached a record low last year.
Many Republicans are likely to resist a larger role for the agency out of concerns taxpayers could be left on the hook for losses.
Obama's proposal, which needs congressional approval, would be open to borrowers who have been current on their payments for the last six months and have no more than one missed payment in the prior six months.
The administration also wants to broaden its Home Affordable Refinance Program, which seeks to provide refinancing options to underwater borrowers who have no equity in their homes.
The White House said the housing regulator overseeing Fannie Mae and Freddie Mac has exhausted its efforts to make HARP more widely accessible to lenders and borrowers, and now it will ask Congress to make changes. Among those requested changes, it will seek to eliminate the costs of appraisals.
President Barack Obama on Wednesday called on Congress to approve a $5 billion to $10 billion effort to help U.S. homeowners refinance as part of a wider package of proposals to shore up the depressed housing market.
Obama had sketched out the proposals in his State of the Union address last week, including a tax on banks to pay for the plan that Republicans quickly rejected.
The White House offered more details on Wednesday ahead of a speech by Obama to expand on his initiative, which some Republicans have derided as an election-year ploy.
Nearly 11 million Americans are underwater on their mortgages, meaning they owe more than their homes are worth. Millions more have lost homes to repossession in states that will be up for grabs in 2012.
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"While the government cannot fix the housing market on its own, the president believes that responsible homeowners should not have to sit and wait for the market to hit bottom to get relief," the White House said in a statement.
The White House is seeking to contrast Obama's stance with that of Republican presidential front-runner Mitt Romney, who has said U.S. foreclosures should be allowed to run their course.
The next contest in the state-by-state battle for the Republican nomination is in Nevada, the state with the highest rate of foreclosure filings for the past five years.
The White House said the refinance program would be run by the Federal Housing Administration. The FHA has already been hard hit by rising defaults on mortgages it had insured, and its cash reserves reached a record low last year.
Many Republicans are likely to resist a larger role for the agency out of concerns taxpayers could be left on the hook for losses.
Obama's proposal, which needs congressional approval, would be open to borrowers who have been current on their payments for the last six months and have no more than one missed payment in the prior six months.
The administration also wants to broaden its Home Affordable Refinance Program, which seeks to provide refinancing options to underwater borrowers who have no equity in their homes.
The White House said the housing regulator overseeing Fannie Mae and Freddie Mac has exhausted its efforts to make HARP more widely accessible to lenders and borrowers, and now it will ask Congress to make changes. Among those requested changes, it will seek to eliminate the costs of appraisals.
Some loans here have a penalty like that but my husband always makes sure that our loans don't. Dreaming of being one day completely debt free (except for those pesky property taxes!!).
Ok, gotcha. It's similar here with some minor differences it sounds like. Our problem here was not so much with the banks. They are fairly heavily regulated as they are not private the way they are there. Still, regulations have tightened up even further since all of this happened. Our problem came primarily through mortgage brokers who were not at the time held to the same standards. So we have some similarities with some differences. I don't think it costs anything to refinance here as the banks already make money off of the interest. It does however cost a penalty to pay off a mortgage early...so if people do sell and not transfer the full amount of the outstanding mortgage to a new home, then they pay a fair chunk of money.
Well, when you refinance here, you typically go through a process again of sharing documentation similar to what you needed the first time around. You can go through the bank that holds your mortgage and bipass some steps but you'd obviously have to be up to date on payments. (By the way, it used to be very common for banks to sell your loan, so whoever held it at first becomes someone different.) Typically in the states though, you shop around for rates and getting the new loan (which basically refinancing is) costs a fee. We've refinanced several times over the years ourselves.
Refinancing is very common here.
There is a resentment by some, i assume, of the government mandating that banks refinance people's loans regardless of their status.
I
Refinancing is very common here.
There is a resentment by some, i assume, of the government mandating that banks refinance people's loans regardless of their status.
I
It is tough. And yes, if you can't afford it you can't afford it. I just get so angry when I see decent people who were completely defrauded. I don't disagree with you, I guess I am more speaking out of frustration. We had so much of the same thing here and I just haven't seen any real repercussions for those that were dishonest.
I'm not understanding your last paragraph though...sorry, I am probably just being dense..lol. Could you please explain what you mean? The loan is already in place right? I know I am completely missing something here....lol.
I'm not understanding your last paragraph though...sorry, I am probably just being dense..lol. Could you please explain what you mean? The loan is already in place right? I know I am completely missing something here....lol.
I will agree that there was a goup of people that preyed on those that shouldn't have bought homes. Mortgage brokers targeted those with bad or questionable credit and charged them large fees to get them into the house they wanted to buy. Those high risk mortgage brokers are now out of business as banks have tightened up on who they give money too much more so during that period.
I know that it was typically the mortgage broker that quoted loan details for us and yes, there were some unsavory folks that just wanted to make money without a care in the world as to the outcome.
But it still doesn't change the issue of some can't afford the home they are in and if you can't make the payments--------- even if you refinance, and you still can't make the payments. . .you can't stay. It stinks, but it is just the reality of where we are all at now verses then. Life and circumstances have changed.
And they do renegotiate terms when you refiance (although I don't think I've heard of a 40 year mortgage term----- 30 would be more typical) but the issue is what if they still can't make the payment even if it is lowered?
I think the issue some have with this idea in this thread is not that people shouldn't refinance their loans but that people would be offered that without the usual loan process and the money offered to offset the refinacing fees.
I know that it was typically the mortgage broker that quoted loan details for us and yes, there were some unsavory folks that just wanted to make money without a care in the world as to the outcome.
But it still doesn't change the issue of some can't afford the home they are in and if you can't make the payments--------- even if you refinance, and you still can't make the payments. . .you can't stay. It stinks, but it is just the reality of where we are all at now verses then. Life and circumstances have changed.
And they do renegotiate terms when you refiance (although I don't think I've heard of a 40 year mortgage term----- 30 would be more typical) but the issue is what if they still can't make the payment even if it is lowered?
I think the issue some have with this idea in this thread is not that people shouldn't refinance their loans but that people would be offered that without the usual loan process and the money offered to offset the refinacing fees.
I think too, that it's easy to forget there was not just a single issue that applies to all who are in danger of losing their homes. I too agree with taking personal responsibility. Yes, there are those that just chose to live beyond their means and now it's catching up with them. But there is so much else at play here.
I know several people that bought their homes when they were easily affordable. Life changed and that is no longer the case. Problem is, if they were to sell, they would not be able to get what they paid. So many would still wind up owing money even though they no longer own the home. One of my closest friends is in that position, and trust me, this is a women who is very responsible financially.
Also, I do think the lenders were very dishonest in their practices. We too were offered far more then what we felt we could afford. So we didn't buy something uber expensive (at least not for our city). But it all truthfullness..had it not been for my husband? I might have. I can be naive financially like so many others I know. And lenders know this, and definately took advantage. Also, not disclosing full terms of a mortgage is a very dishonest practice as Orphanhawk pointed out.
So while I do believe that in some cases the responsibility lies with the individual, I also feel that the economic situation and dishonest practices of lenders are also to blame. To me, a good solution would be renagotiating mortgage terms. Instead of a 20 year term, make it a 40 and lower the payments. Cap what an interest rate can be. All of those things are being done here, and it is helping a great deal.
I know several people that bought their homes when they were easily affordable. Life changed and that is no longer the case. Problem is, if they were to sell, they would not be able to get what they paid. So many would still wind up owing money even though they no longer own the home. One of my closest friends is in that position, and trust me, this is a women who is very responsible financially.
Also, I do think the lenders were very dishonest in their practices. We too were offered far more then what we felt we could afford. So we didn't buy something uber expensive (at least not for our city). But it all truthfullness..had it not been for my husband? I might have. I can be naive financially like so many others I know. And lenders know this, and definately took advantage. Also, not disclosing full terms of a mortgage is a very dishonest practice as Orphanhawk pointed out.
So while I do believe that in some cases the responsibility lies with the individual, I also feel that the economic situation and dishonest practices of lenders are also to blame. To me, a good solution would be renagotiating mortgage terms. Instead of a 20 year term, make it a 40 and lower the payments. Cap what an interest rate can be. All of those things are being done here, and it is helping a great deal.
Here in California the situation is horrible. I've heard stories on the radio of families who bought homes with low mortgage rates which they were verbally promised could be renegotiated. When the rate rose they were denied a change in the mortgage, lost their investment and were thrown out of their homes.
Latinos were targeted given inaccurate translations, not legal but well, these are hard working lower class people.
We have a lot of immigrants and not everyone knows they need a lawyer. These people are guilty only of trusting the banks.
Banks are beginning foreclosure proceedings when some misses one month's payments. And the banks would rather throw people out of their homes and resell the homes, than renegotiate.
The reason is after their homes are foreclosed on, they can't get another mortgage for 3 years regardless of their earnings. The idea is to turn people out of their homes and turn them into renters.
More informatione:
http://www.occupy-our-homes.info/
Latinos were targeted given inaccurate translations, not legal but well, these are hard working lower class people.
We have a lot of immigrants and not everyone knows they need a lawyer. These people are guilty only of trusting the banks.
Banks are beginning foreclosure proceedings when some misses one month's payments. And the banks would rather throw people out of their homes and resell the homes, than renegotiate.
The reason is after their homes are foreclosed on, they can't get another mortgage for 3 years regardless of their earnings. The idea is to turn people out of their homes and turn them into renters.
More informatione:
http://www.occupy-our-homes.info/
I wasn't being sarcastic and I wasn't making fun of you. And I suspect that you're plenty smart enough to tell.
I do agree with you in that limited sense. I am not stupid either and there is no benefit in creating a situation where people are destined to fail. I would never advocate extending credit to a person who could not re-pay it.
I think where we differ is in our immediate response and not our considered response.
Mike
I do agree with you in that limited sense. I am not stupid either and there is no benefit in creating a situation where people are destined to fail. I would never advocate extending credit to a person who could not re-pay it.
I think where we differ is in our immediate response and not our considered response.
Mike
Sometimes I'm not sure when you are making fun of me Mike . . . I might not be smart enough to tell. (being serious with that even though it is a sad statement about myself.)
I do appreciate your empathy for people in difficult situations. Believe it or not, I am empathetic too. It is always easier to talk about issues when no one is sitting there looking at you in pain.
It is a complex world we live in.
I do appreciate your empathy for people in difficult situations. Believe it or not, I am empathetic too. It is always easier to talk about issues when no one is sitting there looking at you in pain.
It is a complex world we live in.
"...If one can refinance and afford the new payment--- good. Problem solved. But if they can not, what are they refinancing for?"
I agree with you in that very limited sense.
Mike
I agree with you in that very limited sense.
Mike
The main point of why I spoke of a personal situation is to say that I know first hand that you can enter into something such as a purchase of property and then have the ground shift underneath you and everything changes. I wouldn't rub it into the faces of those who made a purchase they shouldn't have because maybe it made sense at the time. But, to me, that doesn't mean that all debts are forgiven or that they should continue to keep a property that they can not pay for. If they can refinance with proper documentation that they can make the new payments, great!! But if they can not, I don't get why it is right for them to keep the property.
I'm not trying to take the roof over someone's head in a cold hearted way. But this country as a whole has to learn to live with what they can afford. Even if it is far less than what they once could.
If one can refinance and afford the new payment--- good. Problem solved. But if they can not, what are they refinancing for?.
I'm not trying to take the roof over someone's head in a cold hearted way. But this country as a whole has to learn to live with what they can afford. Even if it is far less than what they once could.
If one can refinance and afford the new payment--- good. Problem solved. But if they can not, what are they refinancing for?.
I don't know the answers Barb.
And I do agree with you. I deplore seeing those creeps too. So many people were swept up in this tragedy which was the result of pure unadulterated greed and avarice and stupidity. My dislike for the creeps is overwhelmed by my sympathy for the reasonable productive folks who simply got screwed. When I see those people I realize that, but for my good fortune, I could be one of them. That terrifies me Barb. I am fiscally prudent notwithstanding my radical politics. I carry absolutely 0 credit card balance and my vehicles and house are all paid for in full. My business has no debt except for a few leased vehicles. Yet, when I see those other "comfortable people" go broke it's scary. I have never been that broke - yes, I was broke but I knew I could always go home. It's just scary and then when I see those big shots who caused the mess making even more money and conducting themselves exactly the same and I get furious - incensed.
Sorry for the rant.
Mike
And I do agree with you. I deplore seeing those creeps too. So many people were swept up in this tragedy which was the result of pure unadulterated greed and avarice and stupidity. My dislike for the creeps is overwhelmed by my sympathy for the reasonable productive folks who simply got screwed. When I see those people I realize that, but for my good fortune, I could be one of them. That terrifies me Barb. I am fiscally prudent notwithstanding my radical politics. I carry absolutely 0 credit card balance and my vehicles and house are all paid for in full. My business has no debt except for a few leased vehicles. Yet, when I see those other "comfortable people" go broke it's scary. I have never been that broke - yes, I was broke but I knew I could always go home. It's just scary and then when I see those big shots who caused the mess making even more money and conducting themselves exactly the same and I get furious - incensed.
Sorry for the rant.
Mike
You're right, Mike, there are people who got laid of from good paying jobs, that can't make their mortgage payments; I wasn't referring so much to those, because I know a more people who took out stupid loans, couldn't make the payments, now they spout off about how the government owes them. Say what????
For those who legitimately lost their home because of loss of job, they do deserver a hand getting back on their feet, but without jobs, how much good is refinancing their mortgage going to do them? They have to pay money to pay, regardless, which means they have to have a job agin.
For those who legitimately lost their home because of loss of job, they do deserver a hand getting back on their feet, but without jobs, how much good is refinancing their mortgage going to do them? They have to pay money to pay, regardless, which means they have to have a job agin.
I don't really know the depth of your situation. Maybe you are on the verge of losing everything and if you are I feel very badly about it. And I would gladly pay more to help you and others like you.
Perhaps I didn't fully appreciate your current circumstances.
My point is that if you are in real imminent danger I sure wouldn't start talking about what a fool you were for making an investment in this fragile economy of the scale where you risk losing everything you have. I wouldn't criticize you for not exercising the prudence to insulate your personal assets from the business.... as most savvy people do. I would feel for you and try to figure out a way for you to keep your home.
Mike
Perhaps I didn't fully appreciate your current circumstances.
My point is that if you are in real imminent danger I sure wouldn't start talking about what a fool you were for making an investment in this fragile economy of the scale where you risk losing everything you have. I wouldn't criticize you for not exercising the prudence to insulate your personal assets from the business.... as most savvy people do. I would feel for you and try to figure out a way for you to keep your home.
Mike
I understand that many are in those situations---- but at what point do you live in the here and now? Should a landlord not be able to evict a nonpaying tenent? Hard times are very sad and everyone has their own story.
I don't mind banks refinancing people that show that they have income to pay their loan. But otherwise, why would they get to stay in a home that they can't afford even if they refinance?
What is a short sale? They get part of their loan forgiven if I am not mistaken.
My husband and I have been impacted by the economic crisis as well with a business property that I mentioned, But as we find we can no longer pay the mortgage on it, we are searching for other options. Renting it, selling it, working with the bank to take it. But we can't just go on as if nothing has changed. We assumed the risk and even though times have changed from when we got into the business, we now have to deal with it. And hopefully they don't take the home we live in during the process. But that is our burden as we assumed the risk.
Just my opinion.
I don't mind banks refinancing people that show that they have income to pay their loan. But otherwise, why would they get to stay in a home that they can't afford even if they refinance?
What is a short sale? They get part of their loan forgiven if I am not mistaken.
My husband and I have been impacted by the economic crisis as well with a business property that I mentioned, But as we find we can no longer pay the mortgage on it, we are searching for other options. Renting it, selling it, working with the bank to take it. But we can't just go on as if nothing has changed. We assumed the risk and even though times have changed from when we got into the business, we now have to deal with it. And hopefully they don't take the home we live in during the process. But that is our burden as we assumed the risk.
Just my opinion.
My house is free and clear too - so what?
Do you really believe that the only people who've had their homes foreclosed or are currently under water with their home mortgages bought homes beyond their means?
A lot of those people had jobs that could have provided sufficient income to discharge their home mortgage obligations when they entered into their contracts. Yes, there were a lot of stupid borrowers but there were also a lot of people who got laid off or whose company closed down or whose jobs got out-sourced abroad. And their misfortune might have had something to do with Wall Street big shots and the big banks cashing in on those other stupid borrowers. Of course, the big shots got bailed out but the homeowners got shafted.
I know people like that. There are people who had $100,000+ jobs and were abruptly out of a job. Look at Silicon Valley. There are people who used to live a very comfortable life style who are now scavenging for bottles and cans and shopping at thrift shops. They never imagined they could lose everything. This economic crisis impacted more than just the foolish borrowers.
Mike
Do you really believe that the only people who've had their homes foreclosed or are currently under water with their home mortgages bought homes beyond their means?
A lot of those people had jobs that could have provided sufficient income to discharge their home mortgage obligations when they entered into their contracts. Yes, there were a lot of stupid borrowers but there were also a lot of people who got laid off or whose company closed down or whose jobs got out-sourced abroad. And their misfortune might have had something to do with Wall Street big shots and the big banks cashing in on those other stupid borrowers. Of course, the big shots got bailed out but the homeowners got shafted.
I know people like that. There are people who had $100,000+ jobs and were abruptly out of a job. Look at Silicon Valley. There are people who used to live a very comfortable life style who are now scavenging for bottles and cans and shopping at thrift shops. They never imagined they could lose everything. This economic crisis impacted more than just the foolish borrowers.
Mike
I agree with specialmom on this one. We purchased a home we could afford, made all the payments, now it's ours free and clear; why should we have to pay to help someone who didn't want to settle for something they could afford?
It stands to reason that someone making $35,000/yr couldn't/can't afford a $300,000 home. Shame on, both, the lenders who offered those loans, and the borrows who signed for them!!
It stands to reason that someone making $35,000/yr couldn't/can't afford a $300,000 home. Shame on, both, the lenders who offered those loans, and the borrows who signed for them!!
Nice catch...I missed that!
"....Obama's proposal, which needs congressional approval, would be open to borrowers who have been current on their payments for the last six months and have no more than one missed payment in the prior six months.
The administration also wants to broaden its Home Affordable Refinance Program, which seeks to provide refinancing options to underwater borrowers who have no equity in their homes...."
The administration also wants to broaden its Home Affordable Refinance Program, which seeks to provide refinancing options to underwater borrowers who have no equity in their homes...."
When I think of this I always remember back when we were buying our home several years ago. We were offered financing that would allow us to get a bigger/more expensive home and to have a low interest rate for a period of time that would then change. You didn't know what it would change to but that initial rate was LOW. To enter into that type of loan, you took a risk. We decided to buy a less expensive home and lock into a higher rate but one that would stay put. We didn't want to assume the risk. Risk. Isn't it some people's choice that they are now in the position they are in? Not everyone's--- but some?
When do we admit that some simply can not afford the home they are in? If someone isn't paying on their home and they don't have the income to afford it, then why should they be allowed to stay there? If I rent somewhere and can't pay the rent, I get evicted. It doesn't matter my sob story---- you gotta pay.
We actually have this situation with a business we own. It stinks. But we assumed the risk. And while it is sad and we are going to lose our shirts, we can't afford the property. We took the risk. That's the way it is.
Anyway, Obama worked on this before and couldn't pass it when he had Democrats ruling congress. This isn't really new.
I know--- I hate what this has done to our economy and there were many contributing factors. And you hate to think of people losing what they have. That is the human side of it. That is the hard part.
When do we admit that some simply can not afford the home they are in? If someone isn't paying on their home and they don't have the income to afford it, then why should they be allowed to stay there? If I rent somewhere and can't pay the rent, I get evicted. It doesn't matter my sob story---- you gotta pay.
We actually have this situation with a business we own. It stinks. But we assumed the risk. And while it is sad and we are going to lose our shirts, we can't afford the property. We took the risk. That's the way it is.
Anyway, Obama worked on this before and couldn't pass it when he had Democrats ruling congress. This isn't really new.
I know--- I hate what this has done to our economy and there were many contributing factors. And you hate to think of people losing what they have. That is the human side of it. That is the hard part.
"Obama's proposal, which needs congressional approval, would be open to borrowers who have been current on their payments for the last six months and have no more than one missed payment in the prior six months."
This is my only beef this...It only helps some people and doesn't help the people who are facing losing their homes...
This is my only beef this...It only helps some people and doesn't help the people who are facing losing their homes...
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