Senate passes near-unanimous mortgage aid bill.
Senate passes near-unanimous mortgage aid bill.
In a 93-1 vote, the Senate passed legislation today to aid “thousands of Americans facing foreclosure because of the ballooning interest rates on their subprime mortgages.” The AP reports:
The bill would allow the Federal Housing Administration to back refinanced loans for tens of thousands of borrowers who are delinquent on payments because their mortgages are resetting to sharply higher rates from low initial “teaser” levels. [...]
President Bush last week announced an agreement with mortgage companies to freeze interest rates for certain subprime mortgages for five years. Democrats in Congress, however, criticized the White House plans as being too limited.
The Senate bill raises the maximum mortgage the FHA can insure in high-cost areas from $362,790 to $417,000 – the same level as loans backed by Fannie Mae and Freddie Mac.
The House passed similar legislation in September.
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o well that will just have to be vetoed, post-haste
December 14th, 2007 at 3:12 pmSo, because of greedy lenders, lending to individuals who shouldn’t have gotten the loan in the first place, YOU get to pay for it. YOUR money via the US government is going into lenders pockets.
December 14th, 2007 at 3:15 pmThis is the result of nonexistent regulation or oversight. Banks can’t get away with it, but Wall Street can and that’s how all those loans were doled out.
Namtillaku is right, the lenders got theirs at our expense.
December 14th, 2007 at 3:18 pmI hope it works and help the people on one hand and the lenders on the other.
December 14th, 2007 at 3:27 pmBut the administration and the Congress waited too long to act on this issue.
The signs of a ‘bubble’ to burst was there for sometime…I hope we learn next time to act faster…
Looks like Katrina case did not teach us a lot .
Sen. Jon Kyl, R-Ariz., was the lone senator to vote no.
Does this jackass just like seeing his name in the paper? I wish someone would ask why he is the lone dissenter.
December 14th, 2007 at 3:29 pmComment by ADDdaddy — December 14, 2007 @ 3:29 pm
It’s not like we aren’t gonna have a HUGE problem with that here in AZ with the growth and housing increases we’ve had over the last 5 years! Yikes! I am truly embarrassed he’s from here, but I am not surprised he voted that way.
December 14th, 2007 at 3:35 pmThe root of the problem is those who follow economic extremists like Ayn Rand and Milton Friedman. Alan Greenspan was one such person. As such, he believed in total DEregulation. Let the businesses run free like kids at Disneyland. The result is this subprime mess. You’ll never hear any of this on a corporate newscast. But its true.
December 14th, 2007 at 3:36 pmOT: It appears that Kucinich has some help for the impeachment of Cheney.
December 14th, 2007 at 3:44 pm#8: Appoint Fed Chiefs who deal in reality not ideology.
December 14th, 2007 at 3:44 pmFrank M
The alternative is the middle ground. Market forces are inherently self-centered and short-sited. That’s why we used to have regulations and anti-monoply laws. Name an industry that has been deregulated that works better now and does a better job of serving the customer. Airline degegulation sure worked out fine, The savings and loan deregulation sure made life easier back in the 80’s. How about the degreguation of media ownership? that helped out your buddies at clear channel and faux news, but it did nothing for honest news reporting.
December 14th, 2007 at 3:47 pm#9. OT: It appears that Kucinich has some help for the impeachment of Cheney.
Comment by IgnoranceIsNotBliss — December 14, 2007 @ 3:44 pm
A second person in Washington who actually believes in his oath to the Constitution? Is there room?
December 14th, 2007 at 3:47 pmFirst, it should be noted that all real estate in North America was stolen from its original users, the native Americans. Second, it should be noted that fraud plays a large part in the current real estate market. “Stated income” on real estate loan applications? Begging for fraud. Try that “stated income” ploy with the IRS and see how far you get. .
As long as the real estate market continued to rise, all the fraud packed into the transactions was happily overlooked by all parties: the buyers, the sellers, the realtors, the brokers, the mortgage lenders, the banks and Wall Street.
A system based on fraud cannot stand forever. Now that real estate prices have peaked and are going down, there is hell to pay. All the speculators are being caught with their supposed “equity” in the red (negative; below zero). It is similar to the effects of taking speed (amphetamines) and then stopping. The body suffers some nasty reactions for a while. So it is with the real estate market.
It is probably best to let real estate prices return to lower levels that are not jacked up by fraud. Then buyers can buy homes with a more secure situation. Search on “real estate crash” or “mortgage meltdown” and find the http://www.patrick.net site for further discussions.
December 14th, 2007 at 3:50 pm“What we are witnessing,…is essentially the breakdown of our modern-day banking system, a complex of leveraged lending so hard to understand that Federal Reserve Chairman Ben Bernanke required a face-to-face refresher course from hedge fund managers in mid-August.â€
- Bill Gross, Manager of the world’s largest bond Pimco
December 14th, 2007 at 3:52 pmThis will have a very limited impact, covering about 250,000 of several million loans that are in danger of default.
December 14th, 2007 at 3:54 pmOnly those who aren’t already behind get helped…
Why was this allowed to happen? At a deep level, I believe that the problem was ideological: policy makers, committed to the view that the market is always right, simply ignored the warning signs. We know, in particular, that Alan Greenspan brushed aside warnings from Edward Gramlich, who was a member of the Federal Reserve Board, about a potential subprime crisis.
Paul Krugman, NY Times, on the Subprime Lending Disaster
December 14th, 2007 at 3:54 pmhttp://www.nytimes.com/2007/12/03/opinion/03krugman.html?_r=1&oref=slogin
#12: It would be nice too see more of them stand up. I know freaking Buchanan won’t since he voted against the torture bill yesterday.
December 14th, 2007 at 3:57 pm#17: Buchanan? More info. please.
December 14th, 2007 at 4:05 pm#18: Vern Buchanan (R-FL) Sarasota County. There was a big thing about the vote count between him and Christine Jennings who is running again against him next year. I can’t stand that guy.
December 14th, 2007 at 4:33 pmBush isn’t going to veto this. He’s already gone on record supporting it.
Anyway, this bill is a complete scam designed to leach even more money out off poor struggling homeowners. Why wouldn’t he be in favor of it?
For people that qualify, and have perhaps made a 10-20k down payment on a home, that is rapidly losing value, they might just very well be better off walking away from these homes. The saving they would have, from renting for a few years instead of owning, would likely more than offset the losses of their down payment.
The US housing market is ABSURDLY overpriced and a massive correction is inevitable. This bill is just putting off the inevitable for a few more years and putting more money in the hands of the banks.
December 14th, 2007 at 4:44 pmInteresting, so it is Dems who are going to bail out speculative home owners and mortgage companies. When did Dems become interested in protecting the rich?
December 14th, 2007 at 4:48 pmWhen did Dems become interested in protecting the rich?
Comment by Jason M. Hendler — December 14, 2007 @ 4:48 pm
The Vote was 93 to 1 ! It sounds bipartisan to me.
And the real estate BOOM was all that kept the economy from sliding into a Borrow and Spend Recession far earlier in Bush’s tenure.
December 14th, 2007 at 5:01 pmI question if Shrub will veto the bill. After all, while it may help some families retain their home, the big beneficiaries are the companies that made these silly loans in the first place.
December 14th, 2007 at 5:02 pmFrom : http://economistsview.typepad.com/economistsview/2007/12/slick-deal-for.html
December 14th, 2007 at 5:07 pm
OT – The Impeachment of Dick Cheney has just picked up significant steam. Three members of the House Judiciary have opened a new website. Please visit and sign up right now! Demand hearings on the Impeachment of Dick Cheney! This is HUGE news!
http://www.wexlerwantshearings.com/
December 14th, 2007 at 5:08 pm#7: What alternative is there to that? You can’t micromanage economies either.
Comment by Frank M — December 14, 2007 @ 3:41 pm
Of course you can.
December 14th, 2007 at 5:32 pmYou can’t micromanage economies either.
Comment by Frank M — December 14, 2007 @ 3:41 pm
The “chapter-a day” feature on our public radio station is the new biography of FDR. Listening to an account of his first 100 days, I get a feel for a man with a plan dealing actively with a national crisis. I’m so tired of privitization. deregulation. and thinking the Govt. can only make things worse.
December 14th, 2007 at 6:03 pm