Reserved Parking For "The Lovely Wife"...TLW...ROAR!

Blog Boy...

I don't have a clue for you. Yet.

But this post reminds me of a cartoon...

The character says "Which way do I go" ... "Which way do I go"...

Any clue what cartoon that was? See. I told you I didn't have a clue :)

TLW...ROAR!

Another thing that bothers me about the rate freeze is that it could encourage people to stay in their homes when they might have moved.  Five years is a long time, These people have likely been there a couple years already, right?  And now they'll get a low rate which will encourage them not to move -- and this is supposed to help the real estate market?  I just don't get it.

People are going to have to jump through a lot of hoops to qualify.  It's the gov't, after all.  I've heard that the phone has been ringing off the hook and the bureaucrats have no answers, of course.

Sarah, The other side of that is what happens when their property increases in value over that 5 year period. Will they have to pay back the lender who supplemented their gain?

Dan, They don't have the answers because they don't even know the right questions. This whole thing is nothing more than a political move to make the folks "feel good". We're screwed!!!

Who is this freeze intended to help?  Wall Street of course!  Do anybody really think that the government is stepping in to help the home owners here?  Not by a long shot!  If they were, they would be setting up a program that would help all the borrowers or at least the ones who would "qualify" to be helped.

This "freeze" is going to end up being welfare for the rich.

Bob Mitchell

ValueList Real Estate Services, Inc. 

BB,  I don't believe that the gov't should intervene in any way whatsoever.  Now, don't get me wrong I don't want to see anyone lose their home, but the points that you bring out are all valid.  Nor should the lenders be let off the hook at anytime either.  As you mentioned, it is all politically motivated and it's going to cost us in the long run.

Bryant--I think the idea is to help those very few that weren't in any of the catagories that you mentioned. Those who were enticed into a mortgage that they could only afford the first year and were told by loan officers that it would be easy to refinance as there would be equity...After all real estate never goes down in value right? wink, wink. These people want to stay in their homes for five more years and are paying their bills but will not be able to continue to pay when the rate increases next year. If the guidelines are strict, it will help those few...The flippers and people who took equity loans to buy toys need to live with their decisions....Just my two cents! :)

Mr. Broker Bryant, you are 100% correct, IMO.  My objection to the governments plan is the inequity. 

I know foreclosures are hard.  Bankruptcy is hard too.  Loosing a job is hard too.  Having high medical expenses is hard too. 

However, the government isn't making bankruptcy easier, it just got harder.  The government isn't helping the laid off home owners in Detroit, they're looking the other way.  The government isn't helping the family with high medical expenses, that would hurt the medical/pharmaceutical industry. 

The government is engaging in public relations and sitting by while Fannie/Freedie/PMI insurers stick it to the home buying consumer. 

We've got a long way to go. 

I clueless on all this I know its happening but I suppose its time to educate myself ... I know Lenn and some other did some posts...  so i guess I'll go do some real work.

Thanks :::: kickin' sand:::::       Hows the new home?

Yes!!  I love a nice healthy dose of REALISM in a surreal market--way to go, Broker Bryant!  Check out the article on the front page of the St. Pete Times this past Sunday as well, for signs that the media is finally getting a clue as well. 

Bryant

I have been reading your posts since you were a regular on the Planet Realtor web site forums. And I never thought Id say this, but ......Yes I think you are missing something.

You are making the assumption that this freeze is designed to bail out the borrower. I dont think thats the case. I think that the program is designed to help the lenders.

I think its important to remember that both parties to these loans "knew"  that the rates would never be reset.  Property values were going up and there was easy money. Everyone thought that these loans would be re written, at a new , but reasonable interest rate, and everyone involved would be able to extract another round of fees.

This "bailout" is only for those loans where the borrower is current but cant handle the reset. So far these are performing loans, just the kind that a lender would love to have on their books. Consider the banks position. They could work something out to keep the underlying value of the asset intact and insure a continuing stream of interest payments, by freezing  the interest rate or they could  foreclose, which will cost them money and replace a performing mortgage with the house itself, probably worth less than   mortgage and paying them no interest.

 Why in the name of all thats holy, would they do that????  I suggest that they have no choice 

Remember how these loans were made. A bank or mortgage company originated the loan and then sold it to a group that securitized the loans and sold the product to an investor group. As part of the deal a service agreement was developed that outlined all the the procedures that the service company is to follow. I suspect that these agreements do not provide for a workout, and of course you cant speak to the guy that actually owns the loan.   In the old days a borrower that saw a problem coming (like the interest rate reset) would meet with his banker and work something out. That cant be done today, The service company does not have the authority to do too much. so the homeowner has no choice. he cant pay the new rate, and the service company has no choice, the agreement dosent provide for a workout

Enter the President and the rate freeze, thats the workout that everyone wanted to make but couldnt. I suspect it was done because the banks wanted it done, but couldnt make it happen. The "bailout " was done for the big money folks not for the homeowner.

Personally I think its just a bandaid, the bigger problem  is the folks that are walking away, because they are upside down. When that shit hits the fan we will have some cleaning up to do. But that will be Hillery's mess to deal with

By the time I got my comment written, Bob had already said it much better than i did...thanks Bob

What if the property values don't budge an inch in 5 years. Did the gov just put off what would have happened anyways? Or would the banks lobby for a second bailout?

BB - Really great points. The comments are excellent and pretty much summarize what this is all about. Especially the comments about Wall Street.

Damned if we know either. We get such little of this fallout up here, or at least we've been lucky not to, that am not sure what the "freeze" helps or not. Like you, we're representing the basic situations you discuss here, and also like you, we're looking for essentially the same seller... all the time. It is THE one that is going to worik, and not break your heart at the same time.

Best, sir... (the voodoo thing tomorrow) 

I don't see how the government can do or force a rate freeze on all these mortgages.  The lenders have a legal deed of trust recorded against these properties - stating the terms of the loan and how and when the rate will change on a mortgage.  This sounds like a legal nightmare to me.  I don't think the government can force changes on a legal agreement! Can They??

The whole bail out  and rate freeze is a terrible idea and should be stopped immediately. We are the laughing stock of the Western World and we need to find a way to fix that. In the rate we are going we will be Bankrupt in 2 years and it is going to cost you a $1000, to fill up your car.

I think you are missing a little something... it's called political bribery.

All the Big Government wants is to buy votes with the people who bought into these ARM mortgages or went on spending sprees.  Politicians are doing nothing but bribing the voters with financial bailouts in exchange for another term in their congressional seat.

We really do need new leaders.

BROKER BRYANT FOR PRESIDENT 

Interesting comments about this freeze being for the lenders,   I for one hadn' thought of this but would certainly put nothing past our current government, especially when it helps their cronnies.

I agree with Terri ...; the freeze is to help those that did not lie on their application have a job and have made every effort to keep their house (getting second jobs etc.)

If these standards were used when people were using the bankruptcy court as a way to clear their debt we all would be in better shape. 

This subprime mess started because people were "gaming" the system.

BB, we spoke with a woman who, in very broken english, explained that she wasn't making any more house payments, because she couldn't.  Her mortgage had gone from 2100 to 4000, and the increases weren't over.  The house is a "starter" by Long Island standards.  She couldn't possibly understand what she signed, and was in dire straights.  She was directed to get help from HOPE in NY, for lack of anywhere else to send her at the time.  We couldn't help- the house is worth a bit less now.  I'd like to see her get her payments returned to the 2100 that she can afford.  When I worked at a car dealership, the finance department made HUGE money (warranties) on higher risk borrowers that didn't quite "get" what they were signing (who needs a Toyota extended warranty?  NO ONE).  If there are lenders like that on the loose, which clearly there were, that would seem "predatory".  Even so, more than that I'd like to see the smarmy lender in jail.  It's a toughie- in the larger view, it's either EVERYONE (not going to happen) or NO ONE, if one were to be "fair."  What a mess. 

BB, My thoughts without going really deep into the subject is this. First of all, Lenders not only have the right but often do negotiate thier loans when the occassion suits thier needs. If the choose to re-evaluate the interest rate hike or even the current rate in order to keep a Buyer paying, then that is thier choice.

In regards to who should be given a break and who should not, I do not beleive that it should be a blanket proposal mandated to cover any qroup. If you choose to evaluate then you should evaluate it each and every loan on the book not just the ones you are told to do so on.

Other wise I would think that you would have a very difficult time justifying why some were bailed out and others cast to the wolves.

I also do not feel that it would be a bad idea if all of the resets on the loans for the adjustment were totally frozen for a period of say 3 years. The fact that an investor purchased those loans planning on the rate increase to make a sizeable profit also means that the same investor also assumed thier would be significant risk to those not able to pay the increase.

As long as the Buyer is paying thier current mortgage they should be allowed to continue it. In the event that they can not then the lender should be allowed to negotiate any settlement that works for them even if it means foreclosure. Foreclosure should only happen though if the Buyer can not pay because they bought specualting on increased value as thier only future out and if the lender does not want to negotiate with them providing they cannot pay the current payment if frozen.

Sorry for the long rambling response. Probably not very coherent as well. Kind of tired ( just back from 3 days in Vegas )

BB:  IF you are clueless...what does that make the rest of us??? Hmmmm.... I'm with you...trying to figure it out also. Let me know if you get the answer!! :-)

Wow! Great comments. I agree completely with Bill and Ron. Sorry Ron but I knew that! I wrote this post to generate some thinking. This proposal is all about politics and keeping the lenders from getting over run with foreclosures. It's also going to create havoc in the securities market. A HUGE amount of these MBS(mortgage backed securities) are owned by over seas investors. What are these investors going to thing when we change the terms on something they have already paid for?

What about all the retirement funds?

This whole "rate freeze" idea is going to be one big ole' mess for our country.

OK I'll be back in the morning. It's 8pm. That means all computers and phones get cut off.

Bryant,

This rate freeze/ government bailout is ill-advised business. The homeowner group that has got second jobs and become creative to make payments on their ARMs, are fuming. Why work extra when weekend investors get government relief?

I also agree with Bill and Ron. It's definitely political. I mean come on..."rate freeze"...ohhh my! I see Costa Rico looking better every day...after all this will cost us billions! JMO

Bryant - You nailed this post. You nailed it.  I know those sellers personally.

Bryant,

If the banks that made these risky loans or the people who bought the paper later want to make a business decision to work out a deal with the people they lent money to, fine.  

The banks made a business decision to make the loans.  Whoever bought the paper made a business decision to do so.  And I agree that this is who the freeze is intended to help.  But I think the government should stay out of it and let the Mr. Market figure out how to fix it or clean up whatever flies. 

I have no answers for these scenarios...except for the ones that were responsible.... which is "good for you".

Bryant:

I believe that if you are one of those distressed borrowers living in your home for the last 2 years, making your mortgage payments in time, knowing that your home is worth substantially less than what you paid for it, and nevertheless, you have decided not to abandon your home, or stop making your payments or file for bankruptcy, then I think that you have demonstrated that you are a responsible borrower and that ownership means something to you. I believe that if you are one of those homeowners, you deserve to be helped with a 5 years "teaser freezer". Five years is a very long time. Values going down will go up again. The housing crisis will fix itself and 600,000 borrowers will be able to refinance at the end of the five years at fixed rates because their homes will be worth more money.  

The only problem is that I think the Government did not make these 5 years "teaser freezer" into a law. They left it to the Lenders to work these problems out. I have been working with lenders for many years and I know that if they can find a way to screw it up, they will.

On the other hand, I know of a lot of speculators that bought fancy condominiums in downtown San Diego before they were built, in pre-sale, in the expectancy that prices would keep rising. As soon as the buildings were completed, they would close escrow and pocket huge gains. I equate this situation to playing black jack in Las Vegas. Sometimes you win, sometimes you lose.  At the end, a lot of investors lost and either they decided to lose their deposit and not close or close and be stuck with a unit that is going down in value and that they can not sell. A totally different situation. Well, that's my opinion.

Isaac Bensussen-www.besthomesinlajolla.com

I was smart enough not to get an ARM, why should we bail out others who wanted what they couldn't afford? I think the government needs to start programs across the country teaching people that they can't have everything they want, when they want it. Discipline is what this country needs to learn. I graduated college with a degree in finance and not once was ever told how to manage money. In elementary school, we should start teaching how to manage money and not buy, buy, buy. Soon after college graduation, we think we have to buy the big house, the Lexus, and go on all the vacations that our parents and grandparents worked their whole lives for.

Sorry for the pointless rant. I know people get in situations sometimes that they can't control, but most people's problems are because they couldn't say no.

Josh Cissell - http://www.HomeMoverOxford.com

Bryant- I am so tired of our country turning into the land of entitlement attitudes. You suffer the consequences of your actions, cause and effect. Let it all take it's course and it will correct itself. Flippers do not deserve a break. Liars do not deserve a break. And I do not buy into that, my mortgage broker scammed me scenario. Most of the people did know they were gambling with their shelter. Sleep in the bed you made. If you did not understand; it says right on the truth and lending form and on your good faith, all the disclosures, and it says, seek the advice of an attorney before signing! I sure as heck do not want my hard earned tax dollars to go to help them all out especially when I did not go and buy flipper properties myself and I did not buy expensive toys with the equity in my house, if you did, than why is that my duty to pay for you? This stuff really gets me mad! NO BAIL OUTS! If you want protective governments, if you want socialist taxes and programs then move to a country that has those and will be happy to take your money! Katerina

HOPE NOW-Lenders and Borrowers
12/07/2007

American Securitization Forum, which represents companies that issue mortgage backed securities, as well as investors, loan servicers and rating agencies, issued a 34 page document outlining guidelines for servicers to follow in streamlining refinancing or loan modifications on adjustable rate mortgages that are scheduled to adjust in the next 2 1/2 years.

The agreement provides framework to evaluate borrowers' situations, and expedites processes for loan servicers to pursue refinancing and loan modification options on a more systematic basis.

Details of how this works;

• Applies to first mortgages only
• Adjustable rate mortgages fixed for 3 years or less (ie: 2/28 & 3/27 ARM's etc.)
• Only loans originated between January 1, 2005 and July 31, 2007
• Have initial reset rate between January 1, 2008 and July 31, 2010
• The streamlined loan modification approach would be begin before the initial reset and typically should begin 120 days prior to the reset of the borrowers rate
• If loan to value (LTV) or cash loan to value (CLTV) is below 97%, servicer may obtain an updated value via desk top appraisal (AVM) or broker price opinion (BPO)
• All servicers of 2nd liens "should" cooperate fully (should does not mean mandatory and can be a HUGE issue)

Borrowers will be divided into 3 segments;

•1.      Refinance - Borrowers who are likely to be able to refinance

•2.      Loan Modification - Borrowers unlikely to refinance

•3.      Loss Mitigation - Borrower is not current and demonstrating a difficulty in meeting the introductory rate

Borrowers in Segment 1 - Refinance

• Current - Means the loan must not be more than 30 days delinquent and must not have been delinquent 1×60 days in the last 12 months.
• Loan to Value Test (LTV) - All current loans with an LTV (based on 1st lien only) greater than 97% are deemed not eligible and will be placed in segment 2.
• Not FHA Secure Eligible - All current loans that otherwise do not satisfy FHA Secure requirements, including delinquency history, debt to income ratios at origination and loan amount standards are within segment 2

Borrowers in Segment 2 Loan Modification

• Occupancy - Borrower currently occupies the property as a primary residence
• FICO Score Test - If the current FICO score is less than 660 and is less than a score higher than the FICO score at origination, the borrowers is considered to have met the "FICO test"
• Rate Adjustment Test - The servicer determines that, at the upcoming reset, the payment amount would go up by more than 10%
• Can't Meet the FICO Test?- The servicer will use an alternate analysis to determine if he borrower is eligible for a loan modification as well as the terms of the loan modification. This would be done on a case by case basis with a full analysis of the borrowers debt to income

For borrowers that are eligible for a fast track modification, the fast track option is non-exclusive and DOES NOT preclude a servicer from using an alternate analysis to determine if a borrower is eligible for a loan modification, as well as the terms of the modification.

Lenders and servicers DO NOT have to fast track loan modifications and if they chose to.

Borrowers in Segment 3 - Loss Mitigation

• Borrowers in segment 3 will be stuck in the never ending grinding wheels of the servicers loss mitigation department and will most likely have a small chance working some kind of loan workout or loan modification with their lender.

Now you can see how few borrowers that this will actually help.  The process for specific borrowers circumstances are more carefully determined to implement this program.  Although it is a step in the right direction this it is a very small step.

Roger Herrick

California Mortgage Broker

www.ContactHerrick.com

I'm all for keeping the government out of business. That's how we've gotten this country into one mess after another. When will we ever learn?

Hey BB,

I think you said it all on one of your comments.  :)  LOL. 

"Dan, They don't have the answers because they don't even know the right questions. This whole thing is nothing more than a political move to make the folks "feel good". We're screwed!!!"

That's great..and one of the reasons why I read your posts.  :) 

I think the government should just stay out of it and let the chips fall where they may.  I don't mind them modernizing FHA to fill the void from the sub-prime meltdown.  However if people signed their loan docs and did not read them or worse told a bunch of lies in order to get the loan, well now they are paying the piper.  The taxpayers should not be responsible.  Freezing rates could actually mess up all the stock market investors and cause a crash.

I just want to add that I cant add very well at all...As one who works very closely in this market, I see more gamers and system knowledgeable people than I see poor and downtrodden. I see multiple failures with similar fraud patterns, some of these gamers have upwards of 10-20  plus properties...Blind Trusts, land trusts, LLC s , its hard to identify the players, but its not hard to see the intent.

SO who gets the protection, I saw a senate subcommittee discussing this and one of the major points I got from this is the Bankruptcy guidelines and how they impact the foreclosure process..It kills the PMI, which was the lenders and servicing agents main recourse. However, if the process is interrupted, according to the senators, the insurance DOES NOT cover the defaulting loan...........Check it out...this to me is the actual reason for this bill, to close this loophole............Best wishes guys

Ths is a bailout for the lenders, disguised as a bailout for the average joe.

This will be interesting to watch and see what transpires before all is said and done. Thanks for the post.

Very good points made. Thanks for the insight. I agree totally. I think the govt is just trying make it look like they are doing something to help.

Bryant I don't think you have missed anything.  I have not read all of the comments, but a contract is a contract and it should be upheld.  I feel sorry for many of these people, but why should others who invested their money, and took a risk be asked to pay for those who made unwise decisions?  

Thank you for taking my post and compunding it more...

I appreciate your thoughts on the subject..

I wrote a post on this very thing the other day.  I was planning on writing about why it isn't good for business... blah, blah, blah.  I got sidetracked. 

Where in the Constitution of the United States of America is it written that the government has any right or responsibility to bail out anyone that makes a bad decision?   Seriously.  Where? 

For all you folks that say that the Government should stay out of it

Lets get started:

In no particular order, lets start cutting government out of our business

1) income tax deduction for interest and taxes paid on your first and second homes.
2) HUD section 8 housing
3) Flood Insurance
4)RESPA
5) FHA
6) Rural Development Housing & Community Facilities Programs
7)VA
8) The 2002 Government Farm Program has been very supportive to farm income, cash rents, and land values. Maintaining the planting flexibility and providing payments for soil and water conservation activities are important aspects of the program. Allowing the grain markets to trade below the loan rates through the LDPs and market loan provisions have kept us competitive in the world markets.
9) Most states have a housing finance agency that offers help for first-time homebuyers. And many local governments offer down payment assistance for first-time buyers.
10) The Environmental Protection Agency's Energy Star Qualified New Homes, and Home Performance by Energy Star (for existing homes).
11)Zoning Regulation
12) building codes and enforcement
13) sewer and water service and enforcement of water quality standards to ensure safe drinking water.
14)trash pick up
15)road building and maintenance
16) imagine the cost of home insurance without the local fire station close by
17) I for one watch the reports of the National Weather Service during Hurricane season. Its nice to know when to put up my hurricane shutters (required by my local government)

18) and lots more I havent thought of yet

Getting away from real estate: ..............analysis found that about 1 in 5 Americans hold a government job or a job reliant on federal spending. A similar number receive Social Security or a government pension. About 19 million others get food stamps, 2 million get subsidized housing, and 5 million get education grants. These folks are our customers

Lots of our kids attend public schools, What the heck, as long as we are keeping government out of our lives...close them down too

Say what you will about FEMA the folks in New Orleans wished we had more and better government programs to help them, not less.

Give me a break....Do you really want Government out of our business?

Bryant - There is no real plan. This is more pontification from the current administration. Nothing I have read seems plausible. It is nice to stand up in a press conference and not have to answer uncomfortable questions regarding NIE's that were read or not read or video tapes of interrogation that may have been witheld from congressional scrutiny. This is more of the same old song from the vaudeville act in the executive branch. Make it sound like you are saving the world after agreeing with lenders to limit help to those that probably don't need it.

Balderdash, pure balderdash.

Take all that is truly offered and it won't amount to much more than a bucket of spit.

Bryant,

You did an excellent job stating your case.  It would be very difficult to argue with your logic, if I were so inclined...which I'm not.

BB, Another great post! It should be all or nothing but in this case it is better to have something than nothing. If the gvt can help out in any way to alleviate the stress that more foreclosure would hit the market, it is better for the economy. However, for those who refi and pull cash out of their property and now are upside down, that would be another story. For the last scenario you've stated, it is truly sad to see that those homeowners are set aside behind the first 2 scenarios. I think every bit helps at this point in time. Sometimes life is not fair. PS. Hmmm.....I see some cookies crumbs around here... Dave

I am convinced before this is over the cure will be worse than the illness. Government has a way of creating a new set of problems by trying to fix the original one.

I think a primary concern here is that IF  a million loans default  (for example purposes) compounded with the ones which have already defaulted; the balance sheets of the lender which currently show (old) market values as Lender  Assets will have to reflect the loan balance amounts as losses-  if that should occur, the losses would depreciate the stock value of the lenders and cause a plunge which would trigger a panic on Wall St.

The bail out was designed to keep Real People in their primary residences.  Ones who were put into loans they did not fully understand, and ones who would in fact be legitimately displaced if the adjusted rate rose 30-50%.   Also many of these people did try to refinance and were declined when the property values fell 30-50%.  And Property Taxes rose sharply in some cases 30-50%.  Putting them in a very precarious predicament.

There is a human face to this problem.  While you cite some great examples of who should not be included, there are inexperienced legitimate first time home buyers drowning out there.

I completely agree however, that late comers to the party who attempted to flip-should be left to flop and flounder.  I also concur that older residents who have established long term comitments in their home ownership, have realized a financial gain as a result of that and can effectively compete in this market successfully. 

I will add that the IRS compounded this problem when they revised the tax law on Capital Gains pertaining to homeownership by increasing the amount of proceeds that would be tax free  (250K single/500K joint) and shortening the length of time in transfering the property to two years to reap the tax benefit. 

This mess is going to take a long time to disappear and if you look at figures...it took about 5yrs for the wave to come in and we were all riding it without even knowing we were balancing on it so long and now the drowning is happening...not many people have learned to swim yet.

I am with you about flip flops.  I seriously feel the foreclosures would be near normal without the speculators in our market, that is.

Great post BB! 

BB, I will have to come back to read all of the comments but I like your analysis.  I think it will be healthy to get back to the good old days when buyers had good credit scores and 20% down.  There was a genuine effort with the subprime market to increase housing affordability but clearly the lenders got carried away.

I'm not sure who is going to be helped either. I have my arm chair opinion, what do you think of this one?

My SIL bought a house after 2005, didn't have a clue what she was signing, just wanted a new and bigger house. They have already been hit with the higher interest rate they can't afford, so they believe they have no recourse. My suggestion was to talk to the lender and try to work something out until they can walk away and into another home that is actually priced for the area. See if they might accept a short sale???? Rents have sky rocketed, so rent wont really be an option either.

 OK, so the next question, how do we get a down payment? drumroll.......your parents! They could use an investment and as prices drop, they will have you with guaranteed rent and you, your husband and 3 teenagers won't be forced to move in with them! A Win Win! I spoke with my In Laws and they too think it might be doable. They need to find the right property that fits within their budget, their great credit at a fixed rate.

A little patience needed until everyone knows exactly how much involvement the Govt. will have and there is a little less indecision. Do you think there's a chance that a well priced investment might come along in inland Hemet, California?  

Very interesting not sure I have an answer for you. I know one thing...I would like to see a program that allows people who homestead to have a chance to stay in their homes. Does this program really do that?

Yeah, I think we can all agree that the gov't is doing what it does best -- making a large political move that is nothing more than one step forward, one step back.  It looks good on the nightly news, but doesn't, and shouldn't, help those who lied.  it doesn't help the economy, because we need people to move to help the economy;)

Ron,

If what it takes is for a program by program rebuttal, I'll start working on it.  But, a long list of programs doesn't mean that another one is the fix that the country needs.  

1) income tax deduction for interest and taxes paid on your first and second homes.
2) HUD section 8 housing
3) Flood Insurance
4)RESPA
5) FHA
6) Rural Development Housing & Community Facilities Programs
7)VA
8) The 2002 Government Farm Program has been very supportive to farm income, cash rents, and land values. Maintaining the planting flexibility and providing payments for soil and water conservation activities are important aspects of the program. Allowing the grain markets to trade below the loan rates through the LDPs and market loan provisions have kept us competitive in the world markets.
9) Most states have a housing finance agency that offers help for first-time homebuyers. And many local governments offer down payment assistance for first-time buyers.
10) The Environmental Protection Agency's Energy Star Qualified New Homes, and Home Performance by Energy Star (for existing homes).
11)Zoning Regulation
12) building codes and enforcement
13) sewer and water service and enforcement of water quality standards to ensure safe drinking water.
14)trash pick up
15)road building and maintenance
16) imagine the cost of home insurance without the local fire station close by
17) I for one watch the reports of the National Weather Service during Hurricane season. Its nice to know when to put up my hurricane shutters (required by my local government)

18) and lots more I havent thought of yet

In a strict constructionist view, most of these are unconstitutional anyway.  At least the federal ones you've mentioned.  Some of the state programs are shaky at best.  Local services aren't under fire.   

I think your missing something..... All this rate freeze is not going to help the people who really needs it... I think that some people made a big mistake. but now the good people ( people who had medical bills and people who are not driving in their home equity) are the ones who will be feeling the pain from all this.

I remember when I was living in England and paying back the loan on the home I owe was more than what the home was worth... but in the end things changed... it took about 5-6 years for things to change.. but it worked out in the end..... now you can't find a flat ( apartment) to buy for 42,000 pounds.....

So I think we should just hang on in there and stop spending and using our credit cards like cash..... 

I also believe that  this is a political way to get more votes and another term of 4 years- I always regret on the missing votes back in 2001???

My head hurts. This plan, not law, is based on voluntary participation by financial institutions. It helps too few people. I think it's a big smoke screen to avoid serious legislation. The current administration really doesn't want any government intervention and wants to appear as taking action in an election year.

I do not know. It just amazes me that people can get loans so far above the market value of the home. Plus that the homes raise and fall so much in just a short period of time. What happened to going up slow and leveling off then moving up again just like the cost of living. Why did they allow the market to shoot up and dip. 

It is just a bad situation and I guess we ride it out or more foreclosure are coming our way.

I am sorry I do not have the answer I guess. 

There are always exceptions to every rule and while you are right on with many of these points, ones that couldn't ring more true are the 'plasma TV' people... wake up Americans.. .by majority we are spoiled brats compared to other countries (not even adding third world countries into the mix!)

Hey guys, Really some great comments here. OK here's another thought.

Why is it that declining property values is a reason to have issue with your mortgage payment?  Declining values in no way at all affect your mortgage payment but it seems to be the reason folks are claiming foul.

The bottom line if folks bought a house where they couldn't afford the mortgage when it adjusted then why did they buy it? Is refinancing at a lower fix rate(with a higher mortgage balance) really going to make that much of a difference? I don't think so.

Now granted there may be good folks that are suffering because of job loss or illness BUT isn't that just a part of life? Bad things happen to good people. That's a fact. Maybe losing a house and being forced to downsize and readjust their finances is a good thing.

I do agree that this is a very complicated issue. if there is a solution it has to be much better than what has been proposed. 

Of course, you're right on target. We started our Mortgage at 7.5% back in the late 90's. When the interest rate went down, we refinanced to a low fixed and are still saving a lot of money. Sure, they offered us lower rates on adjustable, but we remained focused on the savings gift we were about to receive with the higher fixed 6.01%. I remember back in the 80's when friends were dealing with 18-22% loans. OUCH!

Yep, we might be able to afford a Farrari, but know I can't afford to keep it up or pay for the gas! 

Lane....My comment was directed at all the folks that are so quick to say we should keep government out of business. I didnt mean to say all those programs wre good, only that our business is very much dependent on government to make it work and I really dont think anyone here really wants to keep government out of it

Bryant....You asked

Why is it that declining property values is a reason to have issue with your mortgage payment?  Declining values in no way at all affect your mortgage payment but it seems to be the reason folks are claiming foul.

We wouldnt be in this mess if prices had continued to rise. The declining value has screwed both sides, the borrowers and the lenders.  ARMS were sold with the expectation that they would be refinanced, before the rates reset. the borrowers expected to get an 80% loan (if values rose 20%) at an attractive rate and the ultimate owners of the loans expected that they would be paid off in two years. A nice plan but declining values fouled it up. Brings me back to my original comment..... this bail out, if thats what it is, is designed to help Wall Street

I just came across a blog here on AR titled "If you are out of Bankruptcy or Foreclosure, then I have the mortgage for you"     Could this be part of the reason so many are prepared to just walk away from their homes....no consequences.....

And I am one to say that government needs to be out of business.  I say it quickly.  The programs you list that are federal are almost a thesis on why... 

And, the people that took out these loans thinking that values would rise were gambling if they didn't have a valid strategy to deal with the property if values didn't rise.  

If I go to Vegas and lose money, should I get a break from the casino, the government and the airline?  Of course not.  But that is what this amounts to.  people took a gamble with their home... and they didn't have a plan B.