Obama's Next Move - Fighting Foreclosures

[lame54]

http://www.michaelmoore.com/words/latest-news/obama-readies-steps-fight-foreclosures-particularly-unemployed

March 26th, 2010 2:35 AM
Obama readies steps to fight foreclosures, particularly for unemployed
By Renae Merle and Dina ElBoghdady / Washington Post
The Obama administration plans to overhaul how it is tackling the foreclosure crisis, in part by requiring lenders to temporarily slash or eliminate monthly mortgage payments for many borrowers who are unemployed, senior officials said Thursday.
Banks and other lenders would have to reduce the payments to no more than 31 percent of a borrower's income, which would typically be the amount of unemployment insurance, for three to six months. In some cases, administration officials said, a lender could allow a borrower to skip payments altogether.
The new push, which the White House is scheduled to announce Friday, takes direct aim at the major cause of the current wave of foreclosures: the spike in unemployment. While the initial mortgage crisis that erupted three years ago resulted from millions of risky home loans that went bad, more-recent defaults reflect the country's economic downturn and the inability of jobless borrowers to keep paying.
The administration's new push also seeks to more aggressively help borrowers who owe more on their mortgages than their properties are worth, offering financial incentives for the first time to lenders to cut the loan balances of such distressed homeowners. Those who are still current on their mortgages could get the chance to refinance on better terms into loans backed by the Federal Housing Administration.
The problem of "underwater" borrowers has bedeviled earlier administration efforts to address the mortgage crisis as home prices plunged.
Officials said the new initiatives will take effect over the next six months and be funded out of $50 billion previously allocated for foreclosure relief in the emergency bailout program for the financial system. No new taxpayer funds will be needed, the officials said.

[SolidGold]

1. I work in foreclosures, bankruptcies, and evictions

I'll just go ahead and state that we have customers that receive 2000+ referrals for a given district of a state in a single day. This has been a law firms heyday. Multi-Millionaires have emerged from people losing their homes. Isn't America great?

[Joanne98]

2. Cram down!

[jotsy]

3. Too late for me as it turns out.

Wells Fargo auctioned off my home of 15 years two months ago. After six months of no work for hubby (an electrician) until March of 09', we paid $1,400 to enter negotiations for a modification, but the payment plan they generated put an extra $200 a month in their pockets for a year. We asked why and negotiations ended. The house was sold to real estate agents, who in turn sold it to another real estate agent, purchased for half of what it was worth. As I type this from the new apartment, I wonder if we'll ever be considered economically stable enough to buy again. We had paid a total of $100,000 on a $73,000 loan, but no one viewed this as an equitable stake in the property.

The new owners take official possession today, I left a gift for them in the living room window. A flag hanging upside down has been there to greet any passer by for over a week now. No one has inquired as to why.

Big banks are cashing out. Wonder what becomes of the citizenry when the sponge is squeezed dry.

[TwilightGardener]

4. I am sorry to hear that. I hope you can get back on your feet soon--

if it makes you feel better, a realtor I talked to on Saturday said that people who foreclose can usually buy again in two or three years, it's a more forgiving climate than in the past.