- Jun 6, 2007
- 852
- 483
- 910
The Housing Assistance bill bantering around the House and Senate is a great bill, will materially help the foreclosure problem as long as Congress gets the details of the bill right.
The initiative in the bill allowing the FHA to provide an additional $300 billion in mortgages to strapped homeowners is an excellent idea, it could save a lot of Americans from losing their homes. The critical aspect of this initiative is that the bill has to contain specific provisions guaranteeing that the promises the proponents of this initiative are proclaiming in the media will in fact occur. These promises are one, that the homeowners that will be receiving these FHA backed loans will have to show they will be able to afford the FHA loan payments and two, the lenders of these homeowners original loans will accept the outstanding principal of these original loans to be crammed down to an amount that is less than the current market value of the homeowners properties and amounts that when refinanced into an FHA loans the homeowners will be able to afford the resulting loan payments. With the amount of dollars at issue here, a large scale default rate on this FHA program would be a financial disaster for the country it would go down in history as a catastrophe rivaling the 1980s Savings and Loan catastrophe besides the fact that the money used to pay the defaulted loans could do a lot of good for the American people if used elsewhere.
President Bush and the other bank loving Republicans in Washington need to do some real soul searching about their opposition to the cram down provisions in this bill that will be mandatory on lenders. They must consider that the banks and the other owners of the home mortgages at issue here are collectively culpable up to top of their necks for the disastrous negative effects on our country from this foreclosure problem for it has dramatically increased the cost of many types of needed burrowing in our country when such burrowing can be obtained (i.e. student loans, commercial construction loans) and this could have all been avoided if these entities were responsible they should never have made or purchased many of these loans because they were obviously unaffordable for the debtors. These mortgage owners have an obligation to fix the problem they largely caused and accepting this cram down the loans course is a good start. Bush and company need to also ask themselves the question are they again going to deeply hurt America like they did once before with the Bankruptcy Reform Legislation of 2005 which materially reduced our nations offer of a Fresh Start to people that find themselves drowning in debt in America through that legislations creation and mandatorizing of five year onerous repayment programs on certain debtors and the expansion of nondischargeable debt because it was acquired through misrepresentation (some compassion), etc.; people will not easily forget if the Republicans deeply hurt America again with their obstructionism on this bill. Come November they will pay a price at the polls for it, a high rate of Americans (they and their family and friends vote!) losing their homes to foreclosure will not sit well with the American voter and this voter will hold those responsible, the Republicans, accountable.
The other initiative in this Housing Assistance bill which raises the concern that the details of the bill are critically important is the initiative to give or loan $15 billion to state and local governments to buy foreclosed properties, fix-them up and sell them and/or rent them. It is important to focus on this initiative because to be realistic this initiative is going to be in the final bill, too many Senators and House members are supporting this initiative for it to be otherwise. So for Americans that want to see a great housing assistance bill pass quickly they need to look for the bill to contain specific provisions that will stop this money from being squandered away. It is accurate to say that generally speaking throughout the nation there is a significant amount of bad political behavior amongst elected officials, that it, these elected officials helping their friends and allies at the public money trough contrary to the public interest. To counter this type of corruption with respect to this $15 billion, there should be safeguard provisions put in place in the bill. There should be a provision in the bill that the amount paid for a foreclosed property purchased with this bills monies cannot be in excess of the foreclosed property market rate for that foreclosed property. Any major structural project done on a purchased foreclosed property that will be paid for from monies from this bill must be necessary and certified as such from an outside qualified entity. The same certification requirement should be for necessary expenditures on an individual purchased foreclosed property that exceed $10,000.00 in total. Any non-necessary expenditures in total on a purchased foreclosed property should be required to not exceed fifteen-percent of the mark value of like properties in that community. For all construction projects and purchase contracts in excess of $1000.00 on purchased foreclosed properties where monies from this legislation will be used it should be mandated that the recipients of these contracts involving these items should be determined by an open bidding process and the lowest qualified bidder should be selected. It should be mandated that the purchased foreclosed properties can only be sold to individuals who live in the property and can only be resold to individual owner occupiers for the following seven years ( It is not right for public monies to be used to fix-up foreclosed properties that would be sold to businesses or speculators who then use the properties to generate profits such sales would be unfair to hard working tax payers). It should be mandated that purchased foreclosed properties can only be sold for fair market price unless the individual is lower income and middle income with middle income buyers only allowed a set discount (the bill should provide a list of fair discounts) the purpose of the discount is to make the purchase affordable; however, if they resell the property over the following seven years they have to pay the state or local government seller the amount of the discount.
The initiative in the bill allowing the FHA to provide an additional $300 billion in mortgages to strapped homeowners is an excellent idea, it could save a lot of Americans from losing their homes. The critical aspect of this initiative is that the bill has to contain specific provisions guaranteeing that the promises the proponents of this initiative are proclaiming in the media will in fact occur. These promises are one, that the homeowners that will be receiving these FHA backed loans will have to show they will be able to afford the FHA loan payments and two, the lenders of these homeowners original loans will accept the outstanding principal of these original loans to be crammed down to an amount that is less than the current market value of the homeowners properties and amounts that when refinanced into an FHA loans the homeowners will be able to afford the resulting loan payments. With the amount of dollars at issue here, a large scale default rate on this FHA program would be a financial disaster for the country it would go down in history as a catastrophe rivaling the 1980s Savings and Loan catastrophe besides the fact that the money used to pay the defaulted loans could do a lot of good for the American people if used elsewhere.
President Bush and the other bank loving Republicans in Washington need to do some real soul searching about their opposition to the cram down provisions in this bill that will be mandatory on lenders. They must consider that the banks and the other owners of the home mortgages at issue here are collectively culpable up to top of their necks for the disastrous negative effects on our country from this foreclosure problem for it has dramatically increased the cost of many types of needed burrowing in our country when such burrowing can be obtained (i.e. student loans, commercial construction loans) and this could have all been avoided if these entities were responsible they should never have made or purchased many of these loans because they were obviously unaffordable for the debtors. These mortgage owners have an obligation to fix the problem they largely caused and accepting this cram down the loans course is a good start. Bush and company need to also ask themselves the question are they again going to deeply hurt America like they did once before with the Bankruptcy Reform Legislation of 2005 which materially reduced our nations offer of a Fresh Start to people that find themselves drowning in debt in America through that legislations creation and mandatorizing of five year onerous repayment programs on certain debtors and the expansion of nondischargeable debt because it was acquired through misrepresentation (some compassion), etc.; people will not easily forget if the Republicans deeply hurt America again with their obstructionism on this bill. Come November they will pay a price at the polls for it, a high rate of Americans (they and their family and friends vote!) losing their homes to foreclosure will not sit well with the American voter and this voter will hold those responsible, the Republicans, accountable.
The other initiative in this Housing Assistance bill which raises the concern that the details of the bill are critically important is the initiative to give or loan $15 billion to state and local governments to buy foreclosed properties, fix-them up and sell them and/or rent them. It is important to focus on this initiative because to be realistic this initiative is going to be in the final bill, too many Senators and House members are supporting this initiative for it to be otherwise. So for Americans that want to see a great housing assistance bill pass quickly they need to look for the bill to contain specific provisions that will stop this money from being squandered away. It is accurate to say that generally speaking throughout the nation there is a significant amount of bad political behavior amongst elected officials, that it, these elected officials helping their friends and allies at the public money trough contrary to the public interest. To counter this type of corruption with respect to this $15 billion, there should be safeguard provisions put in place in the bill. There should be a provision in the bill that the amount paid for a foreclosed property purchased with this bills monies cannot be in excess of the foreclosed property market rate for that foreclosed property. Any major structural project done on a purchased foreclosed property that will be paid for from monies from this bill must be necessary and certified as such from an outside qualified entity. The same certification requirement should be for necessary expenditures on an individual purchased foreclosed property that exceed $10,000.00 in total. Any non-necessary expenditures in total on a purchased foreclosed property should be required to not exceed fifteen-percent of the mark value of like properties in that community. For all construction projects and purchase contracts in excess of $1000.00 on purchased foreclosed properties where monies from this legislation will be used it should be mandated that the recipients of these contracts involving these items should be determined by an open bidding process and the lowest qualified bidder should be selected. It should be mandated that the purchased foreclosed properties can only be sold to individuals who live in the property and can only be resold to individual owner occupiers for the following seven years ( It is not right for public monies to be used to fix-up foreclosed properties that would be sold to businesses or speculators who then use the properties to generate profits such sales would be unfair to hard working tax payers). It should be mandated that purchased foreclosed properties can only be sold for fair market price unless the individual is lower income and middle income with middle income buyers only allowed a set discount (the bill should provide a list of fair discounts) the purpose of the discount is to make the purchase affordable; however, if they resell the property over the following seven years they have to pay the state or local government seller the amount of the discount.
