Banks to benefit most from White House program to help fight foreclosures

[seafan]

Vicki Needham at The Hill reported this afternoon:


August 15, 2010

Banks will get the biggest benefit from an Obama administration housing program designed to help unemployed homeowners escape foreclosure.
Housing experts expressed concern that banks, not homeowners, will be helped by the White House's $3 billion funding infusion -- $2 billion from the Treasury Department and another $1 billion from the Housing and Urban Development Department -- going to those states hit hardest by the housing market crash and unemployment.

"Giving money to the banks isn't what the government should be doing right now," said Dean Baker, co-founder of the Center for Economic and Policy Research. ..... The basic principle is to help struggling homeowners but with so many people underwater on their mortgages the new funding is unlikely to do much good, Baker said.

"You need to make sure that someone benefits from the program other than banks," he said.

Baker suggested that if the government is going to provide up to $50,000 in loans over the course of two years to those struggling homeowners that the money should be used for any of their needs, not just to pay the mortgage.

He said banks could offer a program that would allow homeowners to rent their home back from the bank at a lower monthly rate than their mortgage payment for up to five years, providing some security for those struggling to make monthly payments.

.....

If the recently announced program is expected to work there has to be a reasonable expectation that at the end of the two-year program homeowners will have some equity in their property.
"If that's not the case, then it's not worth it," he said.
He said he'd be "very surprised" if the vast majority of those who take advantage of the program don't eventually lose their homes.

Foreclosures were up 4 percent in July with 325,229 filings, a nearly 10 percent increase over the same month in 2009, according to a report from RealtyTrac, a group that tracks foreclosure filings.

David Abromowitz, senior fellow at the Center for American Progress, said the main problem with the funding is that lenders will benefit without requiring any concessions or matching of the federal aid.

.....

The bitter lesson of TARP goes unlearned.

[jtuck004]

1. K&R! n/t

[ipaint]

2. And the hits keep coming. nt

[DJ13]

3. More $ for Wall Street, Main Street gets screwed .......again

Im getting sick of this crap.

[txlibdem]

17. Obama's Trickle Down efforts will always fail

See my sig. This is yet another example that Obama (who I voted for and worked so hard to elect) has betrayed the Dems and the American People. His main concern is that big banks and big business ride out this economic trouble unscathed and to hell with the "little people" of this nation.

Wolf in sheep's clothing!

[fogonthelake]

20. yes, they will

[Better Believe It]

45. I remember when Ronald Raygun trickled on us. And Republicans said it was raining!

[dkf]

4. Hello President Obama. When will you understand the problem is the job market?

If you fix that people will be able to weather being underwater. Hawaii did it in the 80s and 90s. But we didn't have a crappy economy with no end in sight. That is what saved us and what could save everyone if only you get things right.

[AlabamaLibrul]

5. Oh man, I'm shocked! n/t

[Greyhound]

6. K&R for more of that "change". n/t

[metapunditedgy]

7. Well, the banks need the money more than normal people do.

They have expensive lifestyles to fund, bribes to pay, etc.

If the government was serious about helping *people*, it would loan the money out at super-low rates, like it does to the banks.

People are trash in the eyes of anyone handling such large amounts of money.

[Skittles]

8. LOL

different day, same story

[xchrom]

9. Gasp! Quelle surprise! Nt

[inna]

11. Same reaction. Sigh.

[KILL THE WISE ONE]

10. might just be time to walk from that mortgage anyway

I keep paying and I am just further and further behind ..... I think it's time to get an appraisal and decide.

[asdjrocky]

12. I wonder how much money they made on the 7 people in my neighborhood that lost their homes.

I know not a single bank would work with them to help keep their homes. So the program doesn't work for most people, and the banks rake it in.

Same as it ever was.

[Octafish]

13. I am so glad.

Don't want to see the undeserving get government help when so many good, hard-working coupon-clipping Americans can better use the money.

[Wilms]

14. Hopefully there will be some Change leftover. n/t

[SammyWinstonJack]

22. Chump change

x(

[earth mom]

15. No surprise here. SSDD. nt

[defendandprotect]

16. What's new . . . ?? Same ole, same ole -- !!

[Fumesucker]

18. Obama is a consummate master of eleven dimensional chess..

You know that this will end up being the bestest evah! program for homeowners through some remarkably Machiavellian twists of political intrigue.















And, for the record, yes this is :sarcasm:

[depakid]

19. Pretty much par for the course with this administration

They've rejected Dean Bakers' and others sensible policy proposals from the outset.

Bottom line is that they really don't give a shit about Main Street.

They really don't.

[lark]

31. They don't give a shit about US!!

They really don't. Obama and his crew are corporatist through and through.

[Lance_Boyle]

21. Good christ! We're giving away more free money to people who can't afford their houses,

and now people want to complain that the mortgage deadbeats ought to be able to spend this new gift money on something other than the house AND STILL GET TO STAY IN THE HOUSE???

For fuck's sake some people just won't be happy until those of us current on our mortgages buy a fucking house for everyone who's not. This is nonsense.

OF COURSE the banks benefit from helping people pay their mortgages! The banks are the ones the money is owed to!

[phleshdef]

23. Most of the people commenting in this thread have no fucking clue what its about at all.

They just want to make their snide comments then pat themselves on the fucking head.

[liberation]

38. I don't think you fully comprehend the magnitude of the projection in your post...

LOL

[depakid]

40. The amount of irony impairment in this sub thread really is impressive

It's as if every knee jerk Obama follower has weighed in without even the first clue about what right to rent is (or was) why it would have worked for ordinary Americans (whereas Obama's program was bound to fail) -and wouldn't have cost the treasury any money up front (as opposed to funneling more to the banksters).

Baker and others explained this very clearly (over and over 18 moths ago). The administration "knew better" though and wouldn't listen- just like they won't listen about a financial transactions and Tobin tax (despite May's high frequency computer trading meltdown).

Right to Rent: Helping Homeowners Without Throwing Money at Banks

http://www.huffingtonpost.com/dean-baker/right-to-rent-helping-hom_b_156913.html

See also: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x5597422

and here: http://sync.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x8528634

[tomp]

24. the banks are also the root cause of the problem.

and have often been paid out one hundred cents on the dollar for bad investment choices.

That's a hell of a lot of our tax dollars obama is giving away without anything in return from the banks.

there are so many things wrong with obama's approach overall it's hard to know where to begin.

[KittyWampus]

36. The amount of stupid on this thread is kind of scary.

[liberation]

39. Oh, yes... the cheap ad hominem, truly the pinnacle of complex thought and informed opinion

LOL

[WillowTree]

44. What KittyWampus said.

[blindpig]

25. The cowboy approves...

[laughingliberal]

33. +1000 nt

[geek tragedy]

26. I wonder how many of the usual suspects condemning this

as corporate welfare can state in one sentence what the program does.

[Lorien]

27. Who the fuck else would benefit?

Truly; if it doesn't benefit the biggest corporations the government has no interest in making it happen. CAMPAIGN FINANCE REFORM people!! Don't wait for the MSM to make it an issue; they never will!

[w4rma]

28. Fire the economic team that is putting the welfare of a few big banks over the rest of us. (nt)

[chunga85]

29. Irish Nuns Sue Morgan Stanley over Bond Deal

August 12,2010

By Patrick Allen CNBC Senior News Editor

A group of nuns from Ireland are suing Morgan Stanley, alleging improper actions by the investment bank that led them to lose at least 5 million euros ($6.4 million), about 80 percent of their total investment, a filing by Stuarts Law showed.

The claim, titled "The Sisters of Jesus and Mary versus Morgan Stanley", is related to bond investments linked to Dresdner Bank debt.

The filing claims Morgan Stanley’s Special Purpose Vehicle (SPV) Saturn's Investment Europe "deliberately or carelessly failed to redeem the notes" following their downgrading in January 2009.

According to the filing, The Sisters of Charity of Jesus and Mary claim the SPV then waited until the price of the bond had risen in June 2009 to redeem the note and securing "Morgan Stanley a profit of at least $11.2 million … by way of a termination of payment."

The nuns are seeking damages of 15 million euros. Morgan Stanley declined to comment on the case.

Read More Here ---->http://www.cnbc.com/id/38672575

Next Week's Headline: Convent Foreclosed. Gunned Down Nuns now happily with their Savior. The Street reacts as Goldman stocks soar.

[chunga85]

30. Couple in Duluth SWAT Standoff Speaks (Foreclosure)

DULUTH, Ga. - A couple who lost their home to foreclosure and spent hours locked in a SWAT standoff with police when they refused to leave, talked about the situation Thursday.

The Grabers said they were living their version of the American dream. The Grabers said they owned their home for more than a decade when Howard Graber suffered a massive stroke. The Grabers said that's when everything changed.

On Wednesday, Gwinnett County deputies went to the Graber's Davenport Park Lane home to serve an eviction notice after the bank had foreclosed on the property. It turned into a four hour standoff and SWAT teams were called in.

"I was afraid for my life. I was afraid for my disabled husband's life. There's no way I was going to go to the front door," said Noya Lee Graber.

Police eventually stormed the house. Howard Graber spent the night in jail.

"They said, 'Taser her! Taser her now!' and I got tasered right on my stomach," said Noya Lee Graber.

Read More Here ---->http://www.myfoxatlanta.com/dpp/news/couple-in-duluth-swat-standoff-speaks-081210

[ProSense]

32. So now there's pre-emptive concern?

From the OP article:

Republicans have argued that it puts taxpayer money at risk, and the special inspector general for the $700 billion Troubled Asset Relief Program is auditing the program.

"It’s troubling that just weeks after the SIGTARP assailed the administration for its lack of success and transparency in managing their signature mortgage-relief program, they have ignored the IG’s warnings and are committing even more money in a failed program that ultimately isn’t helping those who need it the most," Rep. Darrell Issa (R-Calif.) told The Hill.

Issa, ranking member on the House Oversight and Government Reform Committee, said "if the administration were serious about helping the jobless keep their homes, they would be advancing policies that would create jobs and address the root causes of the housing crisis – Fannie Mae and Freddie Mac."

This program was passed under financial reform and was supported by progressive groups.

[laughingliberal]

34. K & R nt

[KittyWampus]

35. This thread demonstrates how clueless some DU'ers are& how desperate they are.

to spin things to trash Obama.

[depakid]

37. Well, the administration's been proven wrong. Repeatedly.

Either they're not nearly as "smart" as they think they are (and this is indeed characteristic of insular, arrogant types of the sort Obama's surrounded himself with) or else they know exactly what they're doing and getting more or less the policy results that they want.

[AllTooEasy]

41. this is such a BULLSHIT COMPLAINT

I have my complaints about Obama (DADT, Afghan surge, etc.), but this rubish. For instance,

"Baker suggested that if the government is going to provide up to $50,000 in loans over the course of two years to those struggling homeowners that the money should be used for any of their needs, not just to pay the mortgage."

What do you think is their biggest need, asshole?! Sending their kids to private school? Gas for the SUV? PLEASE!!!

Obama goes one way, they comeplain. He goes another way, THEY COMPLAIN! You can't pay for people's mortgage without the morgage holders (Big banks, Small banks, credit unions, etc.) getting money!

Do you think the folks who are getting this $50K to prevent homelessness give a flying shit how the bank benefits?!?!?!

[aggiesal]

42. Here's my issue with all this mortgage non-sense ...

My mortgage was held by Washington Mutual (WaMu). When WaMu went backrupt, it was the biggest bank
failure in US history. I believe it still is the largest bank failure to this date.

Because WaMu was soooooo big, the Federal Deposit Insurance Corporation (The FDIC - guaranteed that
our deposit are insured up to $250K or something close to this number).

Because the FDIC could not cover all of the WaMu depositors, the FDIC brokered a deal between WaMu
and Chase Bank. Chase Bank did not want any of WaMu's toxic loans, but the FDIC was forcing them
to accept the toxic loans. Chase walked away from the deal.

The FDIC knowing it couldn't cover all the depositors agreed to the Chase Bank terms, and Chase Bank was
allowed to acquire WaMu at 10 cents on the dollar. In other words, Chase Bank acquired all of WaMu
assets for 1/10th the value, with no toxic loans.

So here is my question:
If WaMu was going to give up it's assets at 1/10th their value, why didn't they come to their mortgage
owners and offer the same deal? I would have paid 15% maybe even 20%. WaMu would have made 5%-10% more
from the mortgage owners, and we would have owned our house outright.

So now Chase purchased my mortgage at 1/10th the value and collecting on the full 100%.

Makes me sick!

[gtar100]

43. Trickle, trickle, trickle...

more like drip, drip, drip.

As in, "Boy, get me my coat. Thank you; here's a quarter. Off to my yacht!"

We know the right thing to do. But the people who have the power to make those decisions choose to benefit themselves unnecessarily and at our expense.

This crap won't stop until we stop it.

[amborin]

46. K&R

[Jackpine Radical]

47. Why should anyone but the banks benefit?

The little people don't contribute much, either to society (just ask the Heritage Foundation) or to political campaigns.

[McCamy Taylor]

48. The Hill is on my "dont trust it" list at the moment. This sounds like Divide and Conquer to me.

Has the Hill run any article about how Wall Street is giving its money to the GOP? Or does it spend its time talking about how Dems are the same as GOP? The latter message is a GOP message,

[donheld]

49. Yes it's really all about Wall Street little about main street

Wasn't it the opposite during the campaign?

[defendandprotect]

50. Another not very surprising "change" .....

Also, let's have the "New Democrat" Obama/WH stop pretending that the only

way to create jobs is by throwing money at corporations!!