U.S. to pay off mortgage investors

[WriteDown]

Source: Reuters

WASHINGTON (Reuters) -- The U.S. Treasury Department will Tuesday tap a $50 billion housing rescue fund to pay off mortgage investors and reduce monthly payments for millions of borrowers, said a senior administration official.

Mortgage servicers that own a small stake in costly loans will receive a cash payment to either erase the debt or agree to accept a reduced return on their investment.

"It will be a shared effort with lenders, investors, borrowers and the government to ease or extinguish second-lien mortgage payments," a senior administration official told Reuters.

During the height of the housing boom, some borrowers were able to buy a home with no downpayment by adding a second lien, and many of those loans are now failing as the economy and housing market struggle....

Read more: http://money.cnn.com/2009/04/28/real_estate/Treasury_mortgage_incentives.reut/index.htm?postversion=2009042811

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I should have bought a MUCH bigger house. As usual, those who cheat end up the winners.

[WriteDown]

1. Words can't descibe my anger at this...

Just reread the article.

[jpak]

8. Heave a teabag dude

:evilgrin:

[pattmarty]

2. No.... The lenders shouldn't have been greedy motherfuckers.

ME, MINE. There's been too much of me and mine in this country. We all can't be on the giving end all the fucking time. Lighten the fuck up. I would rather have some of this (a rather small sum in the total picture) than giving it to the greedy motherfuckers in the financial industry. I think the taxpayers would have been a lot better off just paying off all the "bad" loans instead of giving it carte blanche to the banks.

[WriteDown]

5. You really don't grasp the difference between lenders and

servicers do you? Lenders are doing cartwheels right now because their bad behavior has been rewarded. It will be up to the taxpayers to bail out the slum lords and those who literally used their homes as ATM's. I'm glad none of these "investors" will lose their new boat though :eyes:.

[pattmarty]

16. I think you knew what I meant, if not, well have a nice fucking day.

[WriteDown]

17. See post 14. nt.

[BonnieJW]

12. I agree.

The stim money should have been given to the taxpayers and the poor. They might have used it to pay off credit cards, loans, mortgages. They might have spent it on frivolous things, but bottom line all the money would have gone into the communities and the banks. Even if people used it to buy drugs and liquor, they would be stimulating the economy. The bad debts would have been paid, the banks would have been solvent, small businesses would have customers, colleges and universities would have more students. Obama claimed to believe in the "bottom up" method but instead chose the usual "top down" method which has NEVER worked.

[WriteDown]

13. Ah...the old trickle down theory...

:eyes:

[skeewee08]

3. I know some of you are angry, but there are some of us.....

Who did everything right and due to job loss(plant closure to ) really need this help; to stay in our home. My husband has a job now he has been there a year now but the mortgage company kept trying to put us on a forbearance plan and they refuse to rewrite the loan according to our new income. So this will help us now(I Hope)... And yes we did try to sell the home we had couple come in and was like your home is beautiful and we can see out family here, but then her husband was like under neath his breath we can wait and fine a house in foreclosure. I know crazy......

[WriteDown]

6. Do you have a Home Equity Line of Credit?

Or did you cash out equity in a 2nd mortgage? That is what this article is about.

[Missy Vixen]

19. skeewee, we're in the same boat

We did everything right. We didn't buy more than we could afford, we've made our payments, and my husband got laid off in November. We have a conventional loan. However, our mortgage lender has been dragging their feet on sending us the paperwork to take advantage of the Obama administration's existing homeowner plan. Did I mention that same lender has had their hand out for the bailout funds since the beginning?

I hope that this will help your family. Congratulations to your husband's being at his new job for a year. For the couple that thinks they're getting a steal in foreclosure, they deserve the karma that comes from taking advantage of the grief of others.

I'm really starting to think about suggesting a group for those of us who find ourselves in this situation. Frankly, I'm tired of reading yet more people here who can't wait to lecture the rest of us, who (again,) did everything right, but got laid off through no fault of our own.

[Zuiderelle]

4. Is this only applying to borrowers with second-liens? If so, that's awful.

It certainly doesn't help struggling homeowners who've barely managed to keep up payments on their first mortgage, without getting a second mortgage.

[WriteDown]

7. Nail, meet hammer. nt.

[Doremus]

9. Trillions going to Wall St. oinkers and you're worried about $50B for borrowers.

Reminds me of repukes who moan about people buying shrimp with food stamps while we're shipping pallets of cash to a war based on lies.

Somebody needs a priority adjustment.

[WriteDown]

11. Not borrowers....

Investors and those who used their houses as ATM's. Read the article.

[Doremus]

20. Yes, "borrowers."

Your insistence in referring to them in derogatory terms is all one needs to know about the legitimacy of your argument.

They are people like us; hell, they ARE us. In many cases they were duped, lied to and conned into taking loans they shouldn't have had. Many of them even told the truth and were STILL given loans, after the con men "doctored" their apps.

But none of that matters to someone like you. All you can see is that someone got something you didn't. In that, you share a kindred spirit with people we come to DU to avoid.

[Igel]

15. Moreover, keep in mind what the financial industry bailouts are.

Loans.

Some almost certainly won't be repaid. The rest--to banks, etc.--are currently loans, with an annual interest rate of 5%, or are in return for stock. TARP was supposed to be, in theory, a win-win: banks needing temporary liquidity get money, the US treasury gets debt service and the principle repaid.

The "loans" that won't be repaid are a political liability. Geithner hasn't helped by taking some TARP money intended to be loaned and repurposing it as gifts. This makes the amount that won't be repaid larger.

However, this program is composed of pure gifts to those who assumed that somehow they could afford loans that any reasonable person would have said they couldn't afford.

Our mortgage broker and realtor have been busy pushing us to borrow more. We have a $120k ceiling on any property we look at, and the broker wanted to prequalify us for much more. The realtor took pains to point out the skuzziness of the neighborhoods we're looking in. "You don't really want to live around people that are *that* different from you, do you?" Yes, subtle racism, but there you have it--probably not because she's racist, but because going to mostly-white neighborhoods would be sure to up the price of the house. And therefore of her commission.

It's been hard to *not* succumb to temptation. We've looked at houses we'd love to move into, but which are more than we could easily afford. We have an offer in on one house where the couple that owned it--it was foreclosed--managed to lose it after 3 years or so. They had a very large downpayment, we can tell from the records, and have to wonder--was it the result of a second loan that had a high interest rate? ARM? Probably not the result of unemployment, they lost it before the economy here went south.

[Bluenorthwest]

10. this is a rotten message

yet again, cheaters get rewarded, and the honest people foot the bill.

[Romulox]

14. What's another $50 billion of taxpayer dollars directed at bankers?

This is NOT help for homeowners. This is a subsidy to banks.

[Frank Booth]

18. This is disgusting.

So now we're paying off flippers and the lenders that enabled them? The country's slide into kleptocracy continues.

Overall, I think Obama has done a good job so far, but the administration's stance on many financial issues has sucked. Obama's starting to give the impression that he's in the pocket of the financial industry.