From the hype surrounding the newly announced $26 billion settlement over abusive foreclosure and mortgage servicing practices, one might think that it would single-handedly solve the housing crisis and end underwater mortgages. This is not the case. Like the many versions of President Obama’s refinancing plan, this settlement has large numbers in the aggregate but will probably mean only a little relief for a fairly small number of homeowners. This is not a policy initiative. It is the resolution to court cases against mortgage servicers for some seriously abusive practices. …
They are at it again. Despite numerous unsuccessful tries to develop a government-facilitated plan to refinance problem mortgages, another one appears to be on the horizon. This one, currently being considered by state and federal officials and large mortgage lenders, has a better focus than earlier versions, but would at best help only a small minority of those who have been promised assistance in the past. The good news is that it would focus on providing help for those who have continued to pay their mortgages on time, despite the …
The Washington Post reports that President Obama wants the federal government to continue to have a major role in housing finance, perhaps by creating a new version of Fannie Mae and Freddie Mac. Despite an almost immediate denial of the story by Deputy Treasury Secretary Neal Wollin, the Post’s account is so detailed that it is likely to be true. The story is given extra credence by the fact that it tracks with the Obama Administration’s February comments about the future of housing finance: “As Fannie Mae and Freddie Mac …
Catching you up on clips, commentary and news of the day. Sign up for the daily email update from Scribe. Economy Needs Tax Reform, Not Tax Hikes – J.D. Foster Paul Ryan Schools Sebelius at Hearing … Ouch! – Kathryn Nix Republicans Split on Trade Tactics – Vicki Needham NAT GAS Act Isn’t the Solution for Energy – Calvin M. Dooley Welcome to Jimmy Carter’s 2nd term – Charles Hurt The Primary Education of Indiana’s Dick Lugar – Shira Toeplitz In the Murdoch Hacking Scandal, Roger Ailes Stands to Gain – …
“Helping Families Save Their Homes Act”? Or Neighborhood Destabilization Act: Allows bankruptcy judges to reduce the principal owed on a mortgage, a practice often referred to as a “cramdown.” Judges would be able to reduce interest rates or lengthen the term of the mortgage. H.R. 1106: It actually achieves opposite results by putting millions of homeowners or potential buyers at greater risk of an unstable credit and housing market and creating high interest rates in the future. Temporary? No. Weak? Yes: The simple rule on Capitol Hill when a bill …
There is no doubt that past government intervention in the market, particularly by Fannie Mae and Freddie Mac, is largely to blame for the current financial turmoil. And while past government intervention cannot be used to justify further government interference, we also have to ask how much unnecessary pain the economy must bear. Absent action along the lines proposed by Treasury Secretary Hank Paulson, capital markets at home and worldwide would eventually normalize. But how many large and small companies are going to have to fail to make payroll because …
The following language was circulated on Capitol Hill this morning as Treasury’s plan to purchase residential or commercial mortgages. Heritage released eight goals and strategies that should guide lawmakers during the debate this coming week. LEGISLATIVE PROPOSAL FOR TREASURY AUTHORITY TO PURCHASE MORTGAGE-RELATED ASSETS Section 1. Short Title. This Act may be cited as ____________________. Sec. 2. Purchases of Mortgage-Related Assets. (a) Authority to Purchase.–The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets …
