Housing – Obama and Treasury to add principal writedowns to HAMP program & add plan for unemployed homeowners…

The principal writedowns are 3 years too late, they will be much larger now. So will losses to taxpayers.  Here at MiM we have been following the housing collapse from the epicenter here in Phoenix, and Obama’s first pathetic sellout HAMP program ‘suggestions’ to the banks has gotten us less than 200,000 mods out of a pool of 5 million, with 50 billion earmarked while they extend and pretend and play head games with families in these homes.

The thing people still seem to be having trouble grasping is that we taxpayers are ALREADY on the hook for these defaults via FANNIE FREDDIE. So IMO it would have been far better to a, use TARP for its original purpose of buying up the bad MBS products, or b, encouraging principal writedowns a la the BofA/FDIC method of ensuring a 5 yr cash flow…

We are in the double dip of the housing recession and it will bring the economy down…again…


The White House will announce Friday an expansion of its foreclosure-prevention efforts to include reducing the mortgage loan balances for some distressed borrowers and giving temporary help to the unemployed, people familiar with the plans said.

In the latest overhaul of the year-old mortgage-loan modification program, these people said, the White House will announce plans to allow unemployed borrowers to receive sharply reduced payments—or a break from making any payments—for at least three months and up to six months. The revamp will also require banks to consider writing down loan balances as part of the formula for lowering monthly payments under the federal Home Affordable Modification Program, or HAMP.

In addition, the administration will introduce a program that uses the Federal Housing Administration to insure new loans for borrowers who are underwater, owing more than the current values of their homes.

Under that program, investors who reduce loan balances to 96.5% of the current property value would refinance borrowers into an FHA-backed loan. Investors would have to reduce first-lien mortgages by at least 10%. For properties that have second-lien mortgages, the program is designed to reduce the total mortgage debt to no more than 115% of the estimated property value. Banks that hold second-liens will be eligible for incentive payments if they write down those loans so borrowers can qualify….

Other Resources:
Making Home Affordable Treasury Program
e.Fannie Mae.com (servicer updates)
HUD- Department of Housing & Urban Devlopment
Fannie Mae mortgage customers call Fannie Mae at  1-800-7FANNIE

( 1-800-732-6643         1-800-732-6643) or www.fanniemae.com/homeaffordable
Freddie Mac mortgage customers call Freddie Mac at  1-800-FREDDIE ( 1-800-373-3343) or www.freddiemac.com/avoidforeclosure
VA mortgage customers (thank you for your service) vall VA Financial Counselors at  1-877-827-3702 or www.homeloans.va.gov
FHA –www.fha.gov
Hope Now Alliance (Hank Paulson’s Plan)

1-888-995-4673 or www.hopenow.com


March 25, 2010. Tags: , , , , , , , , , , , , , , , . Economy, FDIC, Finance, Foreclosures, Housing, Obama Administration, Politics, Popular Culture, TARP, Unemployment Statistics, Wall St. 2 comments.

Market Mover Tuesday: Housing data

Update: Sales of existing homes fall 0.6%, third month of declines. This data is PRIOR to the snowstorms, so dont believe anyone who spins it as weather related. That housing credit did just what clunkers did, it borrowed against future sales….

Key housing data points on sales coming in today (Feb home sales 10:00 am) and the critters on the Hill have decided to turn their ‘laser like focus’ to housing (Fannie Mae, Freddie Mac). And it only took them 5 years. Quick on the uptake these critters eh? Meanwhile it looks as though FAN and FRED have RADICALLY cut back on loan volume..which would be good if we were getting them out of the business, but we aren’t so what’s happening?


The government seized control of Fannie Mae // and Freddie Mac // massive companies that purchase home loans, package them into investments and guarantee them against default. The price tag has been huge—$126 billion and growing.Now comes the hard part: figuring out what to do next.

“They have a separate regulator and they are a structural problem that is very large and very difficult to deal with separately,” Paul Kanjorski, Chairman of the Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, told CNBC.

Well what does Team Obama plan for housing? (beyond the ‘extend and pretend’ BS where they string homeowners along on HAMP) Well they are voting PRESENT …AGAIN…real shockah there eh?

With the Obama administration largely mute on the issue, Congress will hold its first hearing Tuesday about how to restructure the mortgage system in the wake of the financial crisis.

…Since the government took over Fannie and Freddie, Obama officials have given few details on their long-term thinking, apart from saying that they want to delay a legislative proposal until next year. In the meantime, officials plan to seek public comment on a list of questions to be published next month….

So in this case, like every other, Obama lets Congress, specifically the House and Pelosi, lead the way. I guess that was the ‘signed, sealed, delivered’ deal he and Pelosi made when she selected him as our candidate . As usual the two parties are diametrically opposed:

Kanjorski said he was favoring some smaller Fannies and Freddies, with some government connection, so if they fail they will not bring the system down with them….

Rep. Spencher Bachus, ranking Republican on the committee, said in a subsequent CNBC interview that he would prefer government exit the industry entirely. “We need to phase it out over time,” he said. “America is about competition and innovation. The federal model simply is not the efficient model.”

So when will this CORE ECONOMIC ISSUE, be addressed?

…Working out a new system is likely to take years. For the time being, the market is still resting on three government pillars: Fannie, Freddie and the Federal Housing Administration.There has been plenty of talk in recent months about how to scale back reliance on those behemoths, which own or guarantee half of all mortgages….

Barney Frank is pushing Treasury for at least some kind of outline of their FAN FRED HOUSING plan. Gee maybe some of the critters realize they will not have a majority much less Chair of the Cmte, much longer….


Fannie Mae and Freddie Mac won’t be allowed to return to a precrisis structure that rewarded shareholders with big profits for years but ultimately saddled taxpayers with massive losses, Treasury Secretary Timothy Geithner will tell a congressional panel Tuesday.

The administration will outline broad principles for the future of the mortgage market at the hearing, including stronger consumer protections and explicit guarantees for any government backstop of mortgages.

“The housing-finance system cannot continue to operate as it has in the past,” Mr. Geithner says in prepared testimony. The administration won’t issue a detailed overhaul proposal until later this year.

The hearing comes as Congress turns up the pressure on the administration to discuss how it plans to rebuild the mortgage market, the recipient of massive government support since the credit crunch began more than two years ago.

We need people to start focusing on it. Nobody was coming up doing the hard thinking,” said Rep. Barney Frank (D., Mass.), who said he called the hearing to accelerate debate on the future of Fannie and Freddie…

…Fannie and Freddie, together with the Federal Housing Administration, now back more than 9 in 10 home loans….

March 23, 2010. Tags: , , , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, TARP, Unemployment Statistics, Wall St. Comments off.

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