1. http://news.bbc.co.uk/1/hi/business/6990822.stm
Sub-prime woes hit US lender GMAC
The sub-prime mortgage downturn has now hit a number of firms
Finance firm GMAC has had to take out a $21.4bn (£10.1bn) loan as it becomes the
latest lender to reveal the impact of the US sub-prime mortgage crisis.
The crisis in the sub-prime mortgage sector has caused a shortage of global credit as banks are unwilling to lend money until the full impact of the situation is known.
2. http://www.iht.com/articles/ap/2007/09/12/business/EU-FIN-France-US-Credit-Crunch.php
IMF official warns of slowing U.S. economy amid subprime crisis
The Associated Press
Published: September 12, 2007
Simon Johnson, director of the IMF's Research department, said fallout from the subprime credit crisis hasn't yet been resolved — and the IMF doesn't understand why tight financial markets continue.
3.
http://online.wsj.com/article/SB118955540976824460.html?mod=googlenews_wsj
Mortgage Lender's Bankruptcy
May Threaten Thousands of Homeowners
By PEG BRICKLEY
September 12, 2007
Freddie Mac said 4,547 loans valued at nearly $797 million are at stake. It said it doesn't have the loan files necessary to pay insurance premiums and property taxes on them, however. "Therefore, there is the imminent risk that borrowers' insurance policies may lapse for nonpayment, subjecting the borrowers to a risk of loss of their mortgaged properties," Freddie Mac said.
4.
http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2007-09-11T170627Z_01_N11430263_RTRIDST_0_RLPC-ALLISONTRANSMISSION.XML
RLPC-Allison Transmission $1 bln loan sold-source
Tue Sep 11, 2007 1:06 PM ET
Citigroup, Lehman Brothers, Merrill Lynch and Sumitomo Banking Corp. have sold a $1 billion block of their previously unsold $3.5 billion bank loan for Allison Transmission at 96 cents on the dollar
5.
http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2007-09-12T145146Z_01_WBT007560_RTRIDST_0_USA-PAULSON-MORTGAGES-URGENT.XML
US' Paulson: subprime woes to take longer to fix
Wed Sep 12, 2007 10:51 AM ET
"Unlike periods of financial turbulence I've witnessed over many years, this turbulence wasn't precipitated by problems in the real economy. This came about as a result of some bad lending practices," Paulson said.
6.
http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2007-09-12T145023Z_01_L12920556_RTRIDST_0_BRITAIN-BANK-UPDATE-3.XML&WTmodLoc=InvArt-C2-NextArticle-2
UPDATE 3-BoE's King signals no bailout for banks
Wed Sep 12, 2007 10:50 AM ET
By Sumeet Desai
As U.S. Treasury Secretary Henry Paulson predicted no quick end to the confidence crisis in credit markets, BoE Governor Mervyn King said a bailout now would only encourage more risky behaviour and cause an even bigger mess later on.
7. http://money.cnn.com/2007/09/11/real_estate/toxic_rate_reset_shock/
Mortgage reset shock: Not so bad
With a little help from the Fed, borderline borrowers could get some relief from a
flood of mortgages whose interest rates are set to jump.
By Les Christie, CNNMoney.com staff writer
September 12 2007: 9:54 AM EDT
Furthermore, many economists believe there's a good chance the Federal Reserve will begin to lower the Fed Funds rate next week. Doug Duncan, the chief economist with the Mortgage Bankers Association predicts the rate will drop a quarter percentage point at each of the next two Fed sessions
But Richard DeKaser, chief economist for National City Corp., warned that if the Fed lowers rates by only a quarter point, versus half a point, Treasury bill yields may not move much. "That [quarter point drop] expectation has already been priced into short-term treasuries," he said.
9. http://money.cnn.com/2007/09/12/real_estate/refi_rescue_status_check/index.htm
Refi rescue
And potentially some tax help, too. Here are breaks that borrowers in a pickle may
receive in the next few months.
By Jeanne Sahadi, CNNMoney.com senior writer
September 12 2007: 12:23 PM EDT
About 240,000 borrowers of the estimated 2 million with adjustable-rate loans scheduled to reset in the next year already are eligible to refinance into a loan insured by the Federal Housing Administration (FHA) - roughly 80,000 of them are eligible because of the newly created FHASecure Act, which loosens FHA's criteria for refinancing
Subprime Blog-September 12, 2007
http://cnnmoneytalkback.blogs.cnnmoney.com/2007/09/12/is-refi-rescue-a-bailout/
CNN TALK BACK BLOG ENTRIES
1.
http://news.bbc.co.uk/1/hi/business/6990822.stm
Sub-prime woes hit US lender GMAC
The sub-prime mortgage downturn has now hit a number of firms
Finance firm GMAC has had to take out a $21.4bn (£10.1bn) loan as it becomes the latest lender to reveal the impact of the US sub-prime mortgage crisis.
GMAC, which has borrowed the cash from Citigroup, said boosting its financial flexibility was "a prudent measure" in the current market environment.
Hit by higher US interest rates, the sub-prime mortgage sector has seen record loan defaults in the past year.
GMAC is a former unit of General Motors which still retains a 49% stake.
Private equity group Cerberus Capital Management owns the remaining 51%.
GMAC started out offering car loans before expanding into the mortgage industry.
Lack of credit
The one-year, short term loan from Citigroup, America's largest bank, replaces GMAC's existing $10bn funding facility from the bank.
GMAC's struggling home lending unit, Residential Capital, lost $254m in the three months to the end of June.
The crisis in the sub-prime mortgage sector has caused a shortage of global credit as banks are unwilling to lend money until the full impact of the situation is known.
Banks have also been putting aside funds to cover any of their own exposure to the sub-prime downturn.
A key problem is that sub-prime loans are often repacked into wider debt groupings which are then resold.
This means that no-one is yet quite sure of the full impact of the woes.
2.
http://www.iht.com/articles/ap/2007/09/12/business/EU-FIN-France-US-Credit-Crunch.php
IMF official warns of slowing U.S. economy amid subprime crisis
The Associated Press
Published: September 12, 2007
PARIS: The U.S. economy will slow next year amid continued trouble in the housing market, likely leading to lower interest rates, a senior International Monetary Fund official said Wednesday.
Simon Johnson, director of the IMF's Research department, said fallout from the subprime credit crisis hasn't yet been resolved — and the IMF doesn't understand why tight financial markets continue.
"The problem hasn't been resolved," despite efforts from major central banks to boost liquidity in the financial markets, said Simon Johnson, director of the IMF's research department. "This makes it hard to assess the outlook."
Johnson predicted that the impact of the lending crisis in the subprime mortgage market in the United States will be limited outside the Americas.
"The effect ... on the real economy is limited because European markets managed to be relatively insulated from the shock," he said.
The IMF is "very comfortable" with moves by the U.S. Federal Reserve and the European Central Bank to make funds available for the tightening credit markets.
Financial markets are expecting the Fed to ease rates further, Johnson said.
"This is a situation where interest rates are likely to fall," he said, adding that U.S. inflation appeared to be rising more slowly than previously thought. "Overall, the interest rate environment in the U.S. is clearly softening."
3.
http://online.wsj.com/article/SB118955540976824460.html?mod=googlenews_wsj
Mortgage Lender's Bankruptcy
May Threaten Thousands of Homeowners
By PEG BRICKLEY
September 12, 2007; Page A15
Thousands of homeowners face an "imminent risk" of losing their homes because of clashes between American Home Mortgage Investment Corp. and its former financial backers, according to Freddie Mac, a government-chartered housing financier.
In documents filed with the U.S. Bankruptcy Court in Wilmington, Del., Freddie Mac said it seized $7 million that homeowners sent to American Home to cover principal and interest payments, property taxes and insurance just before the company's Aug. 6 collapse. American Home quit making payments to tax authorities and insurance companies Aug. 24.
Freddie Mac said 4,547 loans valued at nearly $797 million are at stake. It said it doesn't have the loan files necessary to pay insurance premiums and property taxes on them, however. "Therefore, there is the imminent risk that borrowers' insurance policies may lapse for nonpayment, subjecting the borrowers to a risk of loss of their mortgaged properties," Freddie Mac said.
Property-tax bills will go unpaid, Freddie Mac said, "resulting in increased tax liabilities and possible tax-foreclosure sales." It added it needs a court order allowing it to seize American Home's loan files "to avoid these serious consequences stemming from AHM's inability to service the Freddie Mac mortgage loans."
The wave of mortgage-lender bankruptcies in the past few months has disrupted loan-servicing arrangements and triggered court fights over who should get control of the files necessary to service the loans, court documents show.
American Home has resisted demands that it give up loan-servicing files, hoping to auction its loan-servicing business intact in an effort to raise money for creditors. Loan-servicing businesses have proven to be among the few valuable assets left in the wreckage of the failed lenders. Some of Wall Street's biggest investment banks are fighting for control of them.
For ordinary homeowners, however, the results could be dire, consumer lawyers say. "Companies receive the loan files that they are supposed to be servicing, but the payments don't catch up," said Jill Bowman, an attorney with James Hoyer Newcomer & Smiljanich, a Tampa, Fla., law firm that represents consumers in class-action suits against mortgage companies. "Payments are being deemed late, even when they're not, because they can't catch up with the paper." The result is additional insurance costs and accumulating late fees.
American Home, based in Melville, N.Y., and once one of the country's biggest mortgage lenders, serviced about $50 billion in mortgages. Its bankruptcy-court filing generated particular concern at Freddie Mac and Ginnie Mae, an agency that is part of the Department of Housing and Urban Development.
Just days before American Home's bankruptcy filing, Freddie Mac and Ginnie Mae terminated the company's loan-servicing rights. They also sent representatives to collect loan files from American Home's servicing facility in Irving, Texas.
In court documents, American Home said Ginnie Mae representatives "stood in a line in front of the doors and sat on the stairs, preventing AHM Servicing employees from entering the office." Freddie Mac said American Home "had its security personnel escort the Freddie Mac representatives out."
In addition to Freddie Mac and Ginnie Mae, several Wall Street banks are fighting to extract their loans from American Home's servicing operation. The list includes Morgan Stanley, Deutsche Bank AG, Credit Suisse Group and EMC Mortgage.
In an interview last week, Ginnie Mae's senior vice president, Theodore B. Foster, said Ginnie Mae had seized from American Home some of the insurance and tax payments collected from homeowners. "What's occurred is that we have the money, but AHM hasn't been able to or willing to pay the taxes and insurance, and they have the loan records," Mr. Foster said. "Therefore, we don't know who to pay, and we don't know how much."
4.
http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2007-09-11T170627Z_01_N11430263_RTRIDST_0_RLPC-ALLISONTRANSMISSION.XML
RLPC-Allison Transmission $1 bln loan sold-source
Tue Sep 11, 2007 1:06 PM ET
NEW YORK, Sept 11 (Reuters) - Citigroup, Lehman Brothers, Merrill Lynch and Sumitomo Banking Corp. have sold a $1 billion block of their previously unsold $3.5 billion bank loan for Allison Transmission at 96 cents on the dollar, a source close to the deal told Reuters Loan Pricing Corp. on Tuesday.
The loan financing was funded in early August at 275 basis points over Libor. The $1 billion block is currently being quoted in the 95-96 cents-on-the-dollar range, while its loan credit default swap (LCDS) is quoted around 350-450 basis points.
The underwriters have agreed not to sell the deal further for another two months. The inclusion of this clause will protect pricing on the loan from devaluation, according to a loan investor.
------------------------------------------------------------------------
5.
http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2007-09-12T145146Z_01_WBT007560_RTRIDST_0_USA-PAULSON-MORTGAGES-URGENT.XML
US' Paulson: subprime woes to take longer to fix
Wed Sep 12, 2007 10:51 AM ET
WASHINGTON, Sept 12 (Reuters) - U.S. Treasury Secretary Henry Paulson on Wednesday said that problems with U.S. subprime mortgages will take longer to correct than those in other financial markets due to the wave of interest rate resets coming over the next two years.
Speaking to mortgage servicing executives at the Treasury, Paulson also called for an expansion of mortgage products to refinance mortgages made unaffordable by resets.
"Unlike periods of financial turbulence I've witnessed over many years, this turbulence wasn't precipitated by problems in the real eeconomy. This came about as a result of some bad lending practices," Paulson said.
6.
http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2007-09-12T145023Z_01_L12920556_RTRIDST_0_BRITAIN-BANK-UPDATE-3.XML&WTmodLoc=InvArt-C2-NextArticle-2
UPDATE 3-BoE's King signals no bailout for banks
Wed Sep 12, 2007 10:50 AM ET
By Sumeet Desai
LONDON, Sept 12 (Reuters) - The Bank of England signalled on Wednesday it would not ride to the rescue of banks caught up in the credit crunch by cutting interest rates or flooding markets with cash unless the whole financial system was in danger.
As U.S. Treasury Secretary Henry Paulson predicted no quick end to the confidence crisis in credit markets, BoE Governor Mervyn King said a bailout now would only encourage more risky behaviour and cause an even bigger mess later on.
Moral hazard is not an abstract concept, King said in a written submission to a parliamentary committee. But central banks, of course, stood ready to act in the event of major shock to the financial system.
Echoing European Central Bank President Jean-Claude Trichet's comments on Tuesday, King said that for now banks, as a whole, were well capitalised enough to handle their losses.
"The current turmoil, which has at its heart the earlier underpricing of risk, has disturbed the unusual serenity of recent years, but, managed properly, it should not threaten our long-run economic stability."
REAL ECONOMY RISK
King reiterated it was too early to say what effect the credit crunch would have on the economy. At the start of August, he thought some slowdown in the economy was needed. But the market turmoil would raise borrowing costs for consumers.
"In other words, the crisis has removed the need to hike but not yet led to the need for a cut," said George Buckley, chief UK economist at Deutsche Bank.
Some lenders are already raising their mortgage rates as the cost of money has shot up as banks have become afraid to lend to each other for fear of possible nasty surprises lurking on their balance sheets.
Economists said that could soon start hurting consumers who have already seen their mortgages go up five times in the last year as the BoE has tried to quell inflation after hefty rises in energy bills.
On Tuesday, retailers Next, French Connection and JJB Sports said that already tough trading during Britain's wettest summer ever was getting worse as rising interest rates hit spending.
In the U.S., where the crisis started because of lending to the subprime sector -- people who were such bad credit risks that normally they would not be eligible for home loans -- the economy already appears to be slowing down fast.
U.S. jobs fell for the first time in four years in August prompting markets to bet the Fed will cut interest rates by 50 basis points and moral hazard be damned.
For now, economists say King looks sure to hold his ground. The BoE, alone of the major central banks, has so far shied away from pumping the financial system with cash in order to bring interbank lending rates down.
Its only concession to London financial institutions so far has been to offer them another chance this Thursday to set a new reserve target with the central bank without penalty on the assumption they may have underestimated last week how much ready cash they will need for their daily business.
"King is still playing hard ball," said Brian Hilliard, economist at Societe Generale. "His comments suggest some repricing of risk is necessary."
7.
http://money.cnn.com/2007/09/11/real_estate/toxic_rate_reset_shock/
Mortgage reset shock: Not so bad
With a little help from the Fed, borderline borrowers could get some relief from a flood of mortgages whose interest rates are set to jump.
By Les Christie, CNNMoney.com staff writer
September 12 2007: 9:54 AM EDT
NEW YORK (CNNMoney.com) -- The number of adjustable rate mortgages (ARMs) up for reset is set to peak this fall, with an estimated $50 billion worth poised to adjust to higher rates in October.
The housing and credit markets are bracing for another blow, but recent trends may mean the reset shock will be less painful than expected, especially if the Federal Reserve drops its Fed Funds rate.
Ironically, the recent spike in defaults on ARMS is one reason why borrowers with resetting ARMs should be better off. Fixed-income investors are buying much safer investments, which has pushed up short-term bond prices and brought down interest rates.
"Many 2/28 hybrid ARM interest rates are based on one-year treasury yields," said said Allen Hardester, a mortgage consultant in Maryland. "The new rate will be more affordable."
From a recent high of 5.02 percent in mid-July, one-year Treasury yields have fallen to 4.09 percent as of Sept. 10. The reset rates of ARMs are calculated using an average of several treasury prices, but the final result should be around that 4.09 percent.
Add a margin of 2.75 percent (a common margin according to Keith Gumbinger of publisher of mortgage information, HSH Associates), and it totals an interest rate of 6.84 percent, compared with 7.77 before.
On a $200,000 mortgage, borrowers will be paying $127 less at 6.84 percent than they would at 7.77 percent. For borderline borrowers, that could be the difference between being able to make the mortgage payments or not.
Furthermore, many economists believe there's a good chance the Federal Reserve will begin to lower the Fed Funds rate next week. Doug Duncan, the chief economist with the Mortgage Bankers Association predicts the rate will drop a quarter percentage point at each of the next two Fed sessions.
The yields on short-term Treasury bills tend to follow the same direction as the Fed Funds rate, so ARM reset rates could drop even further into affordable territory.
Said Keith Gumbinger, of the mortgage information publisher HSH Associates, "If you're coming due for an adjustment - I don't want to say you're in for a jackpot - but it could help some on-the-cusp borrowers."
But Richard DeKaser, chief economist for National City Corp., warned that if the Fed lowers rates by only a quarter point, versus half a point, Treasury bill yields may not move much. "That [quarter point drop] expectation has already been priced into short-term treasuries," he said.
Not all resetting ARM borrowers will benefit from T-bill yield declines. Many 2/28 hybrid ARM borrowers started their mortgages at such low "teaser" levels that their rates will rise the contractual maximum of three percentage points even if yields do remain low, according to DeKaser.
And one large class of ARM borrowers - as many as half, according to Gumbinger - who will not be seeing more affordable resets are those with adjustables tied to LIBOR, the London Interbank Offered Rate. Libor has been moving in the opposite direction as treasuries. On Sept. 5, the 30-day LIBOR stood at 5.80 percent, up from 5.33 percent 30 days earlier.
That would send the resetting LIBOR-based loans to about 8.45 percent, considerably higher than the ones tied to T-bill rates.
But the loan resets based on T-bills will certainly be reasonable compared with historical averages if yields remain low or fall further. At 6.84 percent they're not much higher than the current rate for a 30-year fixed, which averaged 6.46 percent last week, according to Freddie Mac.
"It does take some of the pressure off," said Gumbinger. "Maybe the borrower could now wait for a better deal [before refinancing]."
8.
http://money.cnn.com/2007/09/12/real_estate/refi_rescue_status_check/index.htm
Refi rescue
And potentially some tax help, too. Here are breaks that borrowers in a pickle may receive in the next few months.
By Jeanne Sahadi, CNNMoney.com senior writer
September 12 2007: 12:23 PM EDT
NEW YORK (CNNMoney.com) -- Hundreds of thousands of homeowners who may struggle to make mortgage payments are likely to get some relief in coming months, including more options to refinance into lower-cost, fixed-rate loans and tax relief if they do face foreclosure.
About 240,000 borrowers of the estimated 2 million with adjustable-rate loans scheduled to reset in the next year already are eligible to refinance into a loan insured by the Federal Housing Administration (FHA) - roughly 80,000 of them are eligible because of the newly created FHASecure Act, which loosens FHA's criteria for refinancing.
And more changes are likely, with the possibility of helping tens of thousands more.
TalkBack: Is the government taking the right steps to deal with the mortgage crisis?
The FHA program has been geared toward home buyers and homeowners with weak credit. Lenders may be more willing to lend to a buyer with shaky credit when the FHA is insuring the loan.
Borrowers with FHA-insured loans - which they get from private lenders as they would any other mortgage - pay a small premium to the FHA every month. The FHA, in turn, uses those premiums to cover the lender in the event of foreclosure and requires lenders to pursue viable ways to help borrowers avoid foreclosure if they become delinquent.
If you are behind on payments by at least four months but no more than 12, the FHA may even make a one-time interest-free loan to you to make your account current with your lender.
It used to be you couldn't refinance into an FHA loan if you'd been delinquent in your payments for any reason. But with the FHASecure Act, delinquent homeowners qualify for an FHA-insured refi if they have:
-1. A history of on-time payments for at least six months before their loans reset to higher rates
-1. Interest rates scheduled to reset between June 2005 and December 2009
-1. 3 percent equity in their home, or the cash equivalent
-1. A sustained history of employment
-1. Sufficient income to make their FHA-insured mortgage payment and all other obligations
The FHA will still insist that lenders verify borrowers' income and ensure that their total debts don't exceed 43 percent of their income or that their mortgage payment won't exceed 31 percent of income. If those ratios are exceeded, the lender must explain how the homeowner can compensate for that.
For borrowers who qualify, an FHA refi can save them money. Even with the premiums FHA charges, an FHA-insured loan could save a borrower $100 or more a month for every $100,000 borrowed compared to the payments they'd owe under an adjustable-rate mortgage that readjusts upward by 3 percentage points.
And if the homeowner has an FHA-insured loan for five years and has built up 22 percent equity in the home, the borrower no longer needs to pay the premium.
FHA requirements may get even more liberal
Lawmakers also are considering legislation to modernize FHA guidelines, which could make FHA refis available to another 60,000 troubled mortgage borrowers, and open the door to another 140,000 new home buyers who today wouldn't qualify for an FHA-insured loan, according to FHA estimates.
Jaret Seiberg, a financial services analyst at policy research firm Stanford Group, expects lawmakers will pass the FHA legislation, noting that it has broad support in both parties. "FHA reform is the lowest hanging fruit. It's the easiest thing to do."
That legislation would further liberalize FHA loan requirements. Among its key provisions, it would:
Raise loan limits. Today the FHA won't insure loans above $362,790 for single-family homes, and even less in lower-cost areas. Under the bill before the House, which is expected to vote next week, that ceiling would increase to 100 percent of the conforming loan limit for mortgages backed by Fannie Mae and Freddie Mac, currently $417,000.
But Barney Frank, chairman of the House Financial Services Committee, plans to propose an amendment that would boost that new limit to $500,000, and give the FHA commissioner discretion to raise that limit further during mortgage crises.
Reduce down payment requirements. Homeowners would no longer be required to have 3 percent equity or the cash equivalent. They could get an FHA-insured loan with 0 percent down.
Reduce complexity. Reform also would "clear away a bunch of burdensome rules that make FHA difficult to use," Seiberg said.
Foreclosed borrowers may get tax break
For homeowners whose situations can't be remedied with a refi, they may get a tax break if they end up facing foreclosure.
Currently, if you foreclose on your home and the bank forgives a portion of your mortgage debt which isn't recovered by the sale of your home, that forgiven debt is treated as taxable income to you. President Bush has asked lawmakers to provide a temporary exemption from that rule.
Both Seiberg and Clint Stretch, managing principal of tax policy at Deloitte Tax LLP, think it's likely lawmakers to pass that exemption this fall and to make it retroactive so that homeowners who foreclosed in 2007 would be covered.
BLOG, SEPTEMBER 12, 2007
http://cnnmoneytalkback.blogs.cnnmoney.com/2007/09/12/is-refi-rescue-a-bailout/
CNN TALK BACK BLOG ENTRIES
Screwing around with the loan limits and then having a zero down payment program?? You have to be kidding me!! Isn’t that the reason we’re in this mess in the first place? Nothing down and home prices falling. In CA. I don’t think all this political BS is going to do anything except help the law makers feel better.
I’ve been in the mortgage business for about 20 years and a few of us saw this coming. What about relief to the few of us that have ethics and morals in the business, and have never done one of those nasty neg am ARMS? Our business is down…….gone for the moment.
Posted By Lon Alward, Redding, CA : September 12, 2007 4:41 pm
The “bailout” is for the big money boys that made the loans or invested in real estate. The “homeowner” can not loose his house because he never really owned it - he just borrowed a lot of money.
This plan to help homeowners is really another bailout, payed for by taxpayers, so the wealthy won’t loose money.
Posted By Anonymous : September 12, 2007 4:40 pm
One more step toward communism.
Posted By John, Frederick, MD : September 12, 2007 4:39 pm
I should also add that the up front premiums on a loan 1.5% and the monthly primiums .5% (anually) are used pay for the default risk accociated with the this program. Meaning no to next to no cost to the taxpayers
Posted By Rob Raleigh, NC : September 12, 2007 4:37 pm
sink or swim, people need to learn personal responsibility, bail outs enable foolish/ risky behavior to continue . i resent paying my tax dollars other than for services I receive.
Posted By denise digiovanni sanjose ca : September 12, 2007 4:36 pm
I am all for revamping the FHA program and bring it up to speed. As a mortgage profecional that has access to the FHA program it has been invaluble in helping people in trouble that have a recent (2year) history of paying their bills on time and meet the fairly strict but not unreasonable income to debt requirements.
Posted By Rob Raleigh, NC : September 12, 2007 4:33 pm
At best, it’s postponing the inevitable because most who took out these loans don’t manage money/debt in the first place. However, I hate to see more of a “bailout”, because it’s not right to reward the OUTRIGHT STUPIDITY of all parties involved in this, and expect the rest of us to foot the bill!!
Posted By Jeff, Phoenix AZ : September 12, 2007 4:32 pm
Defaulting on a mortgage is a tough pill to swallow, but I wonder if too much assistance will negate the lesson that should be learned here, both for the banking/mortgage industry and the individual homebuyer. The government is probably doing the right thing by providing assistance, but a cool apprehension comes over me whenever the government becomes involved in business. I suppose time will tell the effects of this bailout.
Posted By Dave C., Rockville, MD : September 12, 2007 4:31 pm
We have turned into a country of whining socialists. These people took a risky loan, but now that the risk has occurred, somehow the govt (my taxes) will bail them out. They took the risk, they lived in homes beyond their means, they didn’t save, if they can’t pay, foreclosure is right. I’m sick to death of being responsible, and then I end up having to pay for others irresponsibility.
Posted By Bill, Denver, CO : September 12, 2007 4:23 pm
The solution to this crisis is to allow people who cannot repay their debts to default and allow the companies that issued bad loans to fail
Posted By Anonymous : September 12, 2007 4:20 pm
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