These are CRAZY times. Hope this can help someone who might be in a bad situation.

Actually that loss isn't on the principle but the interest they charged. So it's not really a loss.

Bush Drops Opposition to Housing Aid Bill; House Vote Expected Wednesday

WASHINGTON — President Bush dropped his opposition Wednesday to legislation aiming to calm the chaotic housing market despite his objections to a $3.9 billion provision. The House was expected to vote on the bill Wednesday, and it could become law as early as this week.

Under the bill, the government would help struggling homeowners get new, cheaper loans and would be allowed to offer troubled mortgage giants Fannie Mae and Freddie Mac a cash infusion.

The Bush administration and lawmakers in both parties teamed to negotiate the measure, which pairs Democrats' top priorities — federal help for homeowners facing foreclosure and $3.9 billion for neighborhoods hit hardest by the housing crisis — with Republicans' goal of reining in mortgage giants Fannie Mae and Freddie Mac while reassuring financial markets of their stability.

Bush had objected to the $3.9 billion provision in the measure, saying that it was aimed at helping bankers and lenders, not homeowners who are in trouble.

Treasury Secretary Henry Paulson, in fact, made the same complaint in a talk Wednesday with reporters, calling it a "wasteful" provision. But he also said the agreement will send a strong message to investors around the world and will be key to helping the nation turn the corner on the housing crisis.

"This is a very important message that we are sending to investors around the world," Paulson said, adding that it would play a key role in "turning the corner" on the housing crisis.

White House press secretary Dana Perino announced Bush's switch in an earlier telephone conference call with reporters. "We believe this is not the time for a prolonged veto fight but we are confident the president would prevail in one," she said.

It hands the Treasury Department the power to extend the government-sponsored mortgage companies an unlimited line of credit and buy an unspecified amount of their stock, if necessary, to prop up Fannie Mae and Freddie Mac, two companies chartered by Congress. The two companies back or own $5 trillion in U.S. mortgages — nearly half the nation's total.

"The positive aspects of the bill are needed now to increase confidence and stability in the housing and financial markets," Perino said. "While we have concerns with other aspects of the bill, it is important that the new authorities are put in place promptly. And so President Bush will accept Secretary (Henry) Paulson's recommendation to sign the bill."

She said she expected that the $3.9 billion provision would be included in the final legislation. "With Congress scheduled soon for yet another recess," she said, "the risk of not having a bill until at best the middle of September — if they even were act then — is not a risk worth taking in the current environment."

Congressional analysts estimated Tuesday that the rescue could cost $25 billion, but predicted there's a better than even chance it won't be needed at all.

The bill would let hundreds of thousands of homeowners trapped in mortgages they can't afford on homes that have plummeted in value escape foreclosure by refinancing into more affordable, fixed-rate loans backed by the Federal Housing Administration. Lenders would have to agree to take a substantial loss on the existing loans, and in return, they would walk away with at least some payoff and avoid the often-costly foreclosure process.

The plan also creates a new regulator with tighter controls for Fannie Mae and Freddie Mac and modernizes the FHA.

It includes about $15 billion in housing tax breaks, including a credit of up to $7,500 for first-time home buyers for people who bought homes between April 9, 2008, and July 1, 2009. It also allows people who don't itemize their taxes to claim a $500-$1,000 deduction on their 2008 property taxes. That chiefly benefits homeowners who have paid off their homes and can't claim a deduction for mortgage interest.

And it increases the statutory limit on the national debt by $800 billion, to $10.6 trillion.

The White House, which initially denounced the FHA rescue as too burdensome on the government and risky for taxpayers, dropped most of its objections to the measure in recent weeks in search of a swift deal. The urgent request by Paulson to throw Fannie Mae and Freddie Mac a federal lifeline acted as a powerful locomotive for a deal.

The bill sets a cap of $625,000 on the loans that Fannie Mae and Freddie Mac may buy and the FHA may insure. It lets them buy and back mortgages up to 15 percent above the median home price in certain areas.

Lawmakers abandoned efforts to place conditions on any Fannie and Freddie rescue, but the bill hands the new regulator approval power over the pay packages of executives at the companies regardless of whether the government moves to financially reinforce them.

It also counts any federal infusion for the mortgage giants under the debt limit, essentially capping how much the government could spend to stabilize the companies without further approval from Congress. As of Tuesday, the national debt that counts toward the limit stood at about $9.5 trillion, roughly $360 billion below the statutory ceiling.

http://www.foxnews.com/story/0,2933,389244,00.html

This is one big joke to me. The lending industry is 99% the cause of what is happening now and now we, the tax payers get to bail them out. This whole situation has been caused by the greedy lending officers that were just throwing money at people about 4-5 years ago, whether those people were in a good financial position or not. I personally think some of these loan officers should spend a little time in jail for the deceptions they perpetrated so they could buy their Lexus.

This is crazy. People bought homes they could not afford and now the gov't needs to use my taxpayer money to bail them out.

Wonderful.

yep......and the taxpayers will flip the bill of 25 billion dollars...........i am so fed up with the morons on pennsylvania ave. thinking we tax payers make bookoo bucks and that we just grin and pay for it all........and, a 50 billion dollar bill we will be paying to stop aids in africa..send teachers, not money, but then again they can't even grow food after all these years of teaching......this is another perfect example that our lazy a_ _ government wants to control us by taking our money without our input on how we feel about helping others.....to me, to hell with others, if it can't be learned, it can't be taught...keep our money here and fix the fixable..one of these days, we will unite and refuse to file our taxes.........it needs to happen...

You are 100% correct! I would also add that many of these lenders that wrote the loans on houses that people could not afford, then turned around and sold the loans to banks who did not have a clue on what they were buying.

Some people who bought homes since 2005 have seen their mortgages sold 3 or more times!

And now the banks are failing when people default on the loans and we get to bail out the banks with more taxpayer money.

This country is going to hell in a handbasket.

Amen!

I am a mortgage loan officer and I can tell you that "I" am a very HONEST officer, I have NEVER put anyone into a mortgage that they couldn't afford, nor have I slammed them with HUGE closing costs.. My job was to look out for/help/protect my clients/make them knowledgable to the mortgage process. But I will agree that there are MANY dishonest loan officers out there that are only in it for the buck, which makes it hard for myself as a loan officer, proven by your post.

The Lending Companies/Banks/Dishonest Loan Officers/Dishonest Appraisers are to blame. The Banks made sooo MANY mortgage programs available for clients wanting to purchase and refinance, one being a 100% Mortgage, leaving NO equity in a home. First mistake. Even people with bad credit could purchase a home with NO money down. What happened to saving for that dream home? Appraisers increased values of homes for clients to get the maximum dollar out of their homes. Also, more client's were refinancing to the highest loan to value of their home to pay off all those high interest credit cards, which were no longer a tax deduction..but if you rolled it into your mortgage, you could then claim the interest. Some blame has to be taken by our government and these banks .. NOT just the Loan Officers!

If I had known the government would rescue me from my bad judgement, maybe I would have bought a house I could not afford, instead of a trailer! Geesh,& those of us trying to live within in our means in a trailer park are the ones thought poorly of!

I don't think poorly of you.. home is where you make it a HOME doesn't matter what it may be.

regardless, who makes the loan sends it to the person in charge....all knew it was a faulty loan to begin with........(DO AS I SAY, NOT AS I DO)........
GEE THANKS MORTGAGE COMPANIES SCREWING ALL OF US......

TY Jules, but you know what I mean, trailer park residents are assummed to be lazy & spending all thier money on beer instead of better housing. I have a nice trailer in a quiet park, I would love to buy a real house, & probably could have gotten financed, but I knew I could not afford it. People buying houses they can't afford do not face this stigma, they are considered middle class victims.

Agreed

Damn Republicans

I agree...the entire lending system is messed up. I feel the banks created this mess. Why should the govt. be the only ones responsible?

I'm for letting the whole economy tank...that way it will bring everything down to a REAL value instead of all this puffed up value & out of control inflationary costs.

Then you are one of the very few. One of the ways loan officers were being deceptive that I ran into a few times, as a real estate agent, was not telling my clients what to expect 3-5 years down the road. I tanked two loans that I can remember, while sitting across the table from the lending officer with my clients, by making those lending officers tell my clients what was going to happen when their 4.75% ARMs reset. One couple I was working with had a $40,000 annual income and had come to me pre-qualled for a $350,000 house. Their monthly payment was going to be in the neighborhood of $1800 a month. I went with them to one of the meetings with this loan officer and after a few minutes I asked the loan officer to tell my clients what their monthly payments were going to be in five years. He started beating around the bush and shuffling papers. My clients looked at me with the look of, "what are you talking about?" I asked them if this loan officer had explained to them how an ARM worked and the ramifications of having one. From the looks on their faces I could tell that he had not. I could also tell the loan officer was getting quite hot under the collar. Then I just spelled it out to them, seeing as how the loan officer was reluctant to do it. I told them their $1800 a month payment would become a $4000+ a month payment and the sh** hit the fan.

The loan officer almost screamed that it wouldn't be over $4000 a month, which I knew it wouldn't, but I wanted him to get into the game. I said, "what will it be based on today's rate?" Again, lots of beating around the bush and shuffling papers. "Well, we can't know what the interest rates are going to be at that time!" "I know, but based on today's rate, what will their payment be?" Finally, after much prying I got a straight answer out of him that it would be in the neighborhood of $3600 a month, which was still way out of the realm of comfort for my clients.

Needless to say, that meeting ending not two minutes after that with my clients and I leaving and the loan officer saying he was going to report me to the board. Strangely, I never heard from him or the board.

I took my clients out to lunch, who were still quite shaken by what had happened and we sat down and I discussed with them their options. We ended up toning down the size and price of the house that they would look for and we would have them talk to a lender that I trusted quite a lot. We ended up moving them into a nice 3 bed 2.5 bath house, with a thirty-year fixed loan and they are still in that house and quite happy to be there. I had dinner with them during the last Christmas season and they couldn't stop thanking me for looking out for them, seeing all the trouble going on now in the mortgage industry.

Oh, but you are correct in laying some of the blame on the appraisers for this. I'd say about 10-15% of the blame lies at their feet. These people were giving whatever number the buyers and sellers were asking for, regardless of what the most recent market for those houses had been. I know of agents that would show up at the appraisal with lunch or a box of doughnuts for the appraiser, just to grease the wheels to get the number that they needed.

But, I stand by my original assessment that the loan officers and underwriters are the most to blame for this. If they had turned down even half the loans they approved, or at least, steered the clients to a more manageable loan package, we wouldn't be seeing the mess we are seeing now and I, for one, think the government is dead wrong in bailing out the mortgage companies and banks on this one. They brought this on themselves.

Motion approved and carried .

Double Post .

You are correct, your client's never should have come to you with an approval for $350,000.00. Not with only $40k in income. I too have had SEVERAL clients come to me shopping rates and I have pointed out what other Loan Officers were doing to them, it isn't right. But then like I said, the Banks/Mortgage Companies themselves are the majority to blame. They have their underwriting engines online that you upload all of the clients information, this is where you get an approval. They made their guidelines so far fetched it was unreal.. I would never convince anyone to take out a 100% mortgage. Any ARM's that I had sold.. my clients were told upfront the risks and or pro's/con's... I explained in full detail the ARM product. I have had MANY repeat client's and none of them have gone through a foreclosure or financial difficulty.

But yes the appraisers are to blame too.. for inflating the value of homes. The appraiser that I used will/won't do that, he is very detailed and very true.

I personally had been screwed over by a realtor AND a loan officer when I purchased my first home.. at the time I knew NOTHING about mortgages.. and that's how they get you, they KNOW you what your so called "dream" home so bad, when we got to the closing table our interest rate was 2% higher than quoted and he said he had us locked in. HA! I didn't know you could just walk away from the table?? And who would?? Well I definitely would NOW. I tell my client's .. if ANYTHING changes at the closing table, you CALL me.. my figures will NOT change. The only way the figures were to change, is if it were a refinance and they had taxes due.. the title company changes those figures, not us as loan officers. If it's something other that has changed, I will tell my clients to WALK!

Seriously, the deregulation pushed by Republicans since Reagan and more recently by McSame lackey Phil "Trickle Down" Gramm has allowed drunken recklessness by our financial institutions that makes executives obscenely rich one year, and us taxpayers holding the steaming bag of bad debt **** the next.