The Bush era is closing on a downer. More than four out of five Americans, 81 percent, are unhappy with the way the country is going, the New York Times/CBS News mood poll tells us today, with the economy replacing terrorism and the war in Iraq at the top of their worry list.
They blame government for the housing crisis more than banks or home buyers and favor help for individuals rather than financial institutions.
But that's not what's happening in Washington. After the $29 billion bailout of Bear Stearns, the Senate is cobbling a $15 billion bill that provides tax breaks for home builders but leaves out a provision Bush threatened to veto that would have allowed bankruptcy judges to restructure mortgages to keep owners in their homes. They did include $100 million for counseling people facing foreclosure, presumably to help the newly homeless feel better about their situation.
The March decline of 80,000 jobs is the third in a row, signifying a real recession. For those who still have jobs, wage increases failed to match inflation, in effect giving them a pay cut.
As voters watch their Executive Branch and Congress fumble and stumble on the economy, they may also be depressed by the bottomless quagmire in Iraq that continues to consume lives and billions of dollars. The Petraeus-Ryan tap dancing team will bring very little convincing cheer from a country where the newly trained freedom fighters desert in droves when called into action.
Somebody should check on what the 19 percent of Americans who think the country is going in the right direction have been smoking.
Showing posts with label housing crisis. Show all posts
Showing posts with label housing crisis. Show all posts
Friday, April 04, 2008
Friday, March 07, 2008
Home Wrecking: Victims and Walkaways
The housing crisis started out looking like a death in the family but is now resembling divorce as well. Added to the record numbers of Americans losing their homes because they can't make the mortgage payments are others who can afford to but decide to cut their losses and default voluntarily.
The category of walkaways is made up of speculators as well as new homeowners who were lured by introductory rates into buying bigger homes than they can afford.
"Some financial advisers," the Wall Street Journal reports, "are even encouraging homeowners who are upside down to consider foreclosure, which they see as a purely financial decision with limited negative consequences...(A) web site started in January that offers foreclosure counseling to homeowners advises that borrowers who default on one mortgage can typically get another mortgage between two and four years after a foreclosure. Then, 'before you know it, you will have this behind you and a fresh start!'"
As the politicians ponder ways to ease the crisis with rate freezes and subsidies, the emphasis is on the more than 900,000 households now in involuntary foreclosure, up 71% from a year ago, according to a survey by the Mortgage Bankers Association.
But as home prices continue in free fall, it will be necessary to separate the victims of predatory loan practices from those who saw a free lunch and are now walking out without paying the tab.
Fannie Mae, the government sponsor of loan guarantees, is working on harsher penalties for walking away, pursuing some borrowers in court and lengthening the time between when borrowers default and when they become eligible again for a Fannie Mae-backed loan.
"Of course, we will make exceptions for extenuating circumstances, like divorce or death," says a Fannie Mae executive. "But who we are trying to get are the people who can afford to make payments but have decided not to."
The category of walkaways is made up of speculators as well as new homeowners who were lured by introductory rates into buying bigger homes than they can afford.
"Some financial advisers," the Wall Street Journal reports, "are even encouraging homeowners who are upside down to consider foreclosure, which they see as a purely financial decision with limited negative consequences...(A) web site started in January that offers foreclosure counseling to homeowners advises that borrowers who default on one mortgage can typically get another mortgage between two and four years after a foreclosure. Then, 'before you know it, you will have this behind you and a fresh start!'"
As the politicians ponder ways to ease the crisis with rate freezes and subsidies, the emphasis is on the more than 900,000 households now in involuntary foreclosure, up 71% from a year ago, according to a survey by the Mortgage Bankers Association.
But as home prices continue in free fall, it will be necessary to separate the victims of predatory loan practices from those who saw a free lunch and are now walking out without paying the tab.
Fannie Mae, the government sponsor of loan guarantees, is working on harsher penalties for walking away, pursuing some borrowers in court and lengthening the time between when borrowers default and when they become eligible again for a Fannie Mae-backed loan.
"Of course, we will make exceptions for extenuating circumstances, like divorce or death," says a Fannie Mae executive. "But who we are trying to get are the people who can afford to make payments but have decided not to."
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