real estate:

Housing help for Nevadans in budget bill

Reid announces proposal after meeting with Obama

Steve Marcus / file photo

Home building continues in Anthem in Henderson, although the demand for new homes has dropped precipitously.

Wednesday, March 25, 2009 | 1:14 p.m.

Real Estate in Crisis

WASHINGTON — A proposal from Senate Majority Leader Harry Reid to help Nevada homeowners avoid foreclosure has been included in the budget blueprint making its way through the Senate.

Reid announced the inclusion of his provision this afternoon following a lunch meeting with President Barack Obama and Democratic senators. It was the Senate Budget Committee Chairman, Sen. Kent Conrad of North Dakota, who included Reid’s request in the draft budget.

Details were not immediately available, but Reid earlier this week said Obama's housing plan did not go far enough to help Nevadans whose mortgages are underwater — meaning they owe more than homes are worh.

Reid had asked Conrad to include a a housing reserve fund that could entertain solutions, such as one bill before the Senate that would allow judges to write down the terms of mortgages for homeowners who file for bankruptcy.

Reid had also mentioned a so-called "safe harbor" provision to help mortgage services avoid being sued by investors for rewriting the terms of loans.

Tucking the housing reserve fund into the budget doesn’t mean those provisions would become law. Rather, it makes it more difficult for opponents to kill the subsequent legislation via procedural moves on the floor.

Obama has supported the bankruptcy provision. Already, judges can alter mortgages for second homes or vacation properties, but not primary mortgages. Reid has called this “perverse discrimination.”

Some Nevada housing experts have said having loans rewritten in bankruptcy court may be the best option as housing prices have plummeted.

Critics, however, believe it will lead to higher mortgage interest rates and fees, as banks recoup losses on rewritten loans.

Discussion: 3 comments so far…

By AngryReader

3/25/09 at 3:13 p.m.

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Thank you Harry! The Southwest US was ground zero for this banking/stock scam and we got hit the hardest. The original plan did nothing for southern Nevada or California. We got screwed over far worse than other areas and we need to be compensated for being cheated by the mortgage brokers, corrupt title officers, unscrupoulous appraisers, and real estate crooks.

When a room is full of professionals in the mortgage industry, all getting paid high fees to be there, and they are allowing a 22 year old pizza driver to sign off on a $500,000 mortgage, who's fault do you think that is?

The pizza driver??!?!?!? No one is paying him for his knowledge of finance, lending, and the potential hardship of being a inflation hedge for super rich people. So stop blaming the homeowners and place the blame where it belongs, the professionals that allowed this mess in the first place.
By CronkyVoddy

3/25/09 at 4:56 p.m.

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Angry,

You nailed it. There were lots of people making lots of money by convincing people that buying and buying big was "the American" thing to do.

Read this article in RollingStone that lays out exactly why our economy is in the trouble its in.

Not the pizza guys fault. Not Acorns fault.

Its AIG and Phil Graham.

The Big Takeover
The global economic crisis isn't about money - it's about power. How Wall Street insiders are using the bailout to stage a revolution.

http://www.rollingstone.com/politics/sto...
By UNLV4Life

3/25/09 at 5:17 p.m.

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Wont this encourage people who are upside down to go bankrupt? This crisis WILL NOT die until they REWRITE these loans for the home's current value. It's a tough pill to swallow, but if had already done this, we'd be out of the mess by now and it would have been cheaper than all the other 'fixes.'

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