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Homeowners struggling
Obama administration should take closer look at Nevada’s foreclosure crisis
Sunday, June 28, 2009 | 2:05 a.m.
It was gratifying to learn from President Barack Obama that his administration is reviewing his Making Home Affordable program, which is intended to help financially strapped people keep their homes.
In a round-table discussion Wednesday in the White House with reporters, including Lisa Mascaro of the Las Vegas Sun, Obama said he is aware of Nevada’s foreclosure crisis and is evaluating whether more can be done to help struggling homeowners. He has asked Treasury Secretary Timothy Geithner to determine “what’s working and what’s not, and whether there’s more that we can do.”
We believe the best way to make that assessment would be for Geithner to take an in-depth look at Nevada, California, Arizona and Florida, which are among the states hit hardest by foreclosures. All four are feeling the aftershocks that began with rampant speculation in real estate — including the flipping of properties for quick profit — followed by a housing bubble that burst.
Many homeowners who dutifully made their house payments on time are now saddled with mortgages that — through no fault of their own — are far greater than the plummeting values of their homes. If the Obama administration wishes to prevent more foreclosures from occurring and help the economies of these states recover, his administration should find ways to make it easier for qualified homeowners to obtain refinancing.
That is a problem in Las Vegas right now because for homeowners to qualify for refinancing assistance under the president’s program, they cannot owe more than 105 percent of the home’s current value. As Mascaro reported, that is increasingly a problem because of the sharp decline in home values.
Senate Majority Leader Harry Reid and Rep. Dina Titus, both Nevada Democrats, have proposed that Obama loosen the equity requirement to enable more homeowners to take advantage of the program. That makes sense from Nevada’s perspective, where unemployment has topped 11 percent.
Leaving the refinancing program unchanged could have the unintended effect of making Nevada’s crisis worse because that would place foreclosure rates at risk of going even higher.
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"Many homeowners who dutifully made their house payments on time are now saddled with mortgages that -- through no fault of their own -- are far greater than the plummeting values of their homes."
Gee, some of my stock investments have gone down in value. Perhaps the government should refund my losses.
The cigar guy once said, "It's the economy stupid."
Obama could care less about the economy. It is priority number 1,323,893 on his list.
What was nearly the first act of Obama? He raised taxes. That does not help the economy.
The energy bill will be a drag on the economy by raising taxes on its citizens and driving up the cost of goods. Obama does not care.
The health care bill wil be a drag on the economy by raising taxes on its citizens and driving up the cost of goods. Obama does not care.
The trillions and trillions in new deficit spending will drive up interest rates and generate higher inflation (like higher gas prices). Obama does not care.
Obama just does not care about the economy.
Oh, by the way, Obama has created or "not destroyed" over 125 ka-trillion jobs using his fuzzy math.
Obama just does not care.
"Obama said he is aware of Nevada's foreclosure crisis and is evaluating whether more can be done to help struggling homeowners."
Whats to evaluate? The program has not worked.
The Government through TARP and tax avoidance laws geared to protect and expanded bank reserves and liquidity has provided a major disincentive for a bank to process a "short sale" or "loan modification".
The new 2008 and 2009 foreclosure laws were complex, hard to implement, clumsy, restrictive, and ultimately provided an indeterminate or worse end situation for the home owner, and are counter to the bank reserves and liquidity goals.
Initially in 2007 and 2008, Bankers and Builders are in a race to the bottom to clear a housing inventory. Banker won the every round by selling foreclosures below replacement cost.
How is it that these banks are all acting and pricing the same way in concert with each other? Is there collusion?
Banks have no incentive to refinance.
In 2009, the Fed is loaning money to banks at 0%, with the government owned AIG paying out the foreclosure insurance, with direct bailout money to cover reserve calls, with tax write offs when they buy securities and no taxes after they hold to sell banks are making money on the backs of the down and out mortgage holders.
Banks have no incentive to refinance.
The way to accomplish that is to delay, delay, and delay and blame the homeowner for some bank paperwork SNAFU.
Business Week report in the June 8th issue that JPMorgan Chase bought Washington Mutual for just $1.9 billion and is looking to pocket $29.1 billion over the life of the loans.
How about a simple program where if you have a loan today you can convert it to a 30 year 3% fixed backed by the FED. The government already own half of the mortgages through Fannie and Feddie and insure most mortgage through AIG so what is another 50% amoung friends.
No restriction
With the number of jobs being lost do to the Obamanation we call the economy no one will be making house payments in another year.
Why do people think refinancing will solve all their problems? There is this notion that if you can refinance, you can save your house.
Rates are not much different over the past few years. The cost to refinance if high. Thousands. It takes years to make the money back. I know some got on adjustable rates that may be getting high, but most are not gonna save that much on a different loan.
Out of work, laid off, reduction in pay, loss of business, REFINANCING won't solve the problem.
Does anyone ever consider that maybe, just possibly, the goverment is not the answer to your problem?