Housing: Treasury to pay servicers and homeowners to do short sales

From the radical to the sublime, or the sublimely stupid. Are we in the Twilight Zone or what? I dunno anymore. If these yahoos cannot get the servicers to do meaningful mods, then at this point why the hell not pay people to leave their homes and pay servicers to do their fiduciary DUTY by allowing a short sale@@?!!@@ Off The Rails. And they think servicers will do MORE mods when they can get paid another fee to do short sales where they already make money?

What a clusterfxck this whole thing has been and continues to be. HOLC DAMMIT! We would have bought these houses ONCE. Now we are paying and paying and paying. When FAN FRED FHA have to write these loans down taxpayers will pay yet again for these same houses.

I mean talk about moral hazard. It is a moral hazard to buy the loans directly through HOLC once, when we own FAN FRED anyway, but it is not moral hazard to pay people to leave their homes and loans? And to keep interfering in the market so it does not correct? If we bought them, once, we would be done in one fell swoop. This endless tinkering is what leads to market uncertainty and lack of capital investment.

But by all means let’s BS around the sanctity of the contract. Who are they kidding? No contract has been protected since Chrysler bondholders got screwed and we all know it. We are paying for these losses ANYWAY as all these loans are now owned by FANNIE and FREDDIE and increasingly, FHA.

WE the taxpayers are ALREADY the damned owners. When the short sales go through WE the taxpayers will take the loss via FAN FRED and have to send them MORE money. Why not leave the people in their houses if we have to pay for losses anyway? But nooooo then the banks.servicers couldn’t get nice fees right? frakkers. sigh.

WSJ:

Under the plan, borrowers will receive $1,500 from the government if they sell their homes for less than the amount of their mortgages. Mortgage-servicing companies will also receive $1,000 for each completed short sale. The program is open to borrowers who may be eligible for the government’s loan-modification program, but don’t end up qualifying, or are delinquent on their modification, or request a short sale or deed-in-lieu transaction.

The short-sale program is the latest addition to the Obama administration’s $75 billion foreclosure-prevention plan, which includes incentives for mortgage companies and investors to rework troubled loans. The government first said in May that it would include short sales in the program, but it has taken months to finalize the details.

Under the new guidelines, second-mortgage holders can receive up to $3,000 of the sales proceeds in exchange for releasing their liens. Investors who hold the first mortgages, meanwhile, can collect up to $1,000 from the government for allowing such payments.

Borrowers who complete a short sale under the program must be “fully released” from future liability for the debt, according to the guidelines…

That ‘fully released’ is key. In recourse states homeowners are liable for the difference between the short sale and the loan balance on the mortgage. But this guideline will release people from that debt. Also the IRS has a nifty habit of coming after people for taxable income on that difference. However there is a loophole there…

WSJ:

The Internal Revenue Service counts debt forgiveness–the difference between the home’s sale price and the amount owed on the mortgage–as regular income, although there are exceptions for bankruptcy, insolvency, forgiven deductible mortgage interest and seller-financed debt. You also cannot deduct losses from price declines, or expenses you incur for real estate brokers, attorneys or others involved in the sale. Primary homeowners, however, get a break from being taxed on the shortfall, at least until December 31, 2012, thanks to the Mortgage Forgiveness Debt Relief Act of 2007…

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December 1, 2009. Tags: , , , , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, TARP, Taxes, Unemployment Statistics, Wall St. 1 comment.

Twofer Tuesday: Twilight Zone style for Nancy Pelosi who tells Charlie Rose ‘a VAT tax is on the table’

Golden Earring courtesy of lin1968

It’s official, Nancy Pelosi is in the Twilight Zone. She told PBS last night a VAT tax is on the table (The Hill):

Pelosi, appearing on PBS’s “The Charlie Rose Show” asserted that “it’s fair to look at” the VAT as part of an overhaul of the nation’s tax code. “I would say, Put everything on the table and subject it to the scrutiny that it deserves,” Pelosi told Rose when asked if the VAT has any appeal to her.

The VAT is a tax on manufacturers at each stage of production on the amount of value an additional producer adds to a product.

Pelosi argued that the VAT would level the playing field between U.S. and foreign manufacturers, the latter of which do not have pension and healthcare costs included in the price of their goods because their governments provide those services, financed by similar taxes.

“They get a tax off of that and they use that money to pay the healthcare for their own workers,” Pelosi said, using the example of auto manufacturers. “So their cars coming into our country don’t have a healthcare component cost.

Gee, wonder why Nancy is raising AUTO MANUFACTURERS, the PENSION LIABILITIES and a VAT TAX now? Could it be b/c GM has ALREADY BURNED THROUGH THE 50B in taxpayer dollars and the UAW cannot meet their pension obligations? Could be rabbit could be…

“Somewhere along the way, a value-added tax plays into this. Of course, we want to take down the healthcare cost, that’s one part of it,” the Speaker added. “But in the scheme of things, I think it’s fair look at a value- added tax as well.”

Pelosi said that any new taxes would come after the Congress finishes the healthcare debate consuming most lawmakers’ time, and that it may come as part of a larger overhaul to the tax code.

Everyone got that? As soon as they are done ramming healthcare through they will lay a VAT tax on our axxes. Everyone is registered to vote for 2010 right?

Twilight Zone mashup courtesy of FatherMcKenize:

“The segments of intro divide the different seasons. All episodes are in order in which they first aired (instead of production order), I believe, except Occurrence at Owl Creek Bridge which is purposely put last, just because I thought it was more climactic at the end (I’m used to seeing it at the end of the Zicree guide also!)”

October 6, 2009. Tags: , , , , , , , , , , , . Entertainment, Fantasy, Horror, Music, Mystery, Popular Culture, Sci Fi, Supernatural, Suspense. Comments off.

UPDATE: House passes bill..will Senate GOP filibuster?..TARP Hearing on the Hill

Final Update: 841pm EST:  219 Yeas, we have it (only needed simple majority of 218 to pass it). It has passed the House. The southern state GOP Senators are the force to be dealt with now. Not a coincidence, the foreign car makers are all located in the South…

Update 8:38pm EST: The House is voting right now, 213 yeas to 136 nays and 84 still to vote..it should pass the House. The hangup will be tomorrow in the Senate, Shelby R-AL seems to be determined to spearhead a filibuster, backed by Coburn and Ensign..Harry Reid needs to GROW A SPINE, Hillary can help him find one so we can GIT R DONE..

Update: 5:38 pm EST: See CNBC Video of Joel Kaplan WH Deputy Chief of Staff on Policy on Big 3 bailout deal reached b/w WH and Congressional Dems here

Update 5:25pm EST: The oversight report is out, it focuses on Treasury needing to verify how the banks are spending the money from TARP and if it is being loaned out-let’s put that one in the No Shxt Sherlock files shall we? And it questions WHY TREASURY WON’T IMPLEMENT SHEILA BAIR’S FDIC PLAN! YES! Also see the Forbes reporting on the GAO feedback…:

…The oversight panel believes the public has the right to know how financial institutions that have received public money are using that money,” according to a report produced by the Congressional Oversight Panel for Economic Stability. “It also believes that Treasury should be responsible for holding individual institutions accountable for how they use public’s money.”…

-snip-

..Maloney added that lawmakers are considering introduction of legislation that would require Treasury to use $24.4 billion of the remaining bank bailout funds to employ Bair’s mortgage modification proposal. The measure would require Treasury to implement the mortgage modification package to gain congressional approval to use the remaining $350 billion in funds.

The report also calls on Treasury to provide details why it is opposed to a plan introduced by Federal Deposit Insurance Corp. Chairwoman Sheila Bair that would use $24.4 billion of the bailout fund to assist lenders to modify mortgages as a plan to avert foreclosures

Update: clips of Kashkari attempting to defend the indefensible..in clip 4 he sounds like a Dr Seuss book: front foot, back foot, day foot, night foot..he cannot say if 30 million bonus is inappropriate executive compensation either…and GOP Rep. McCotter says he will try this defense on his wife next time they are lost without a map-HA HA!!If you can catch this hearing replayed on CSPAN later do so! Check the CSPAN library, they should have it up soon. The hearings are in overtime …

See opening testimony on CSPAN here

(more…)

December 10, 2008. Tags: , , , , , , , , , , , , , , , , , , , , , , , . Big 3, Cabinet, Economy, Finance, Foreclosures, Housing, Labor Department, Politics, Popular Culture, TARP, Unemployment Statistics, Wall St. Comments off.

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