In-Depth look – Home Prices To Continue Decline – Bloomberg

Interview and discussion with Robert Shiller of the Yale University. He gives his thoughts on the housing market that shows weakness. (Bloomberg News)

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June 9, 2009. Tags: , , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Politics, Uncategorized, Unemployment Statistics, Wall St. Comments off.

Housing Update: Team Obama to unveil New, Additional Incentives for servicers/lenders to modify, includes second liens…

housinginyourhands

They are moving to address second liens, ie Home Equity Loans finally. Sadly it appears we will be paying off the banks who made the dopey decisions that got us here. And no word on WHO will be paying to extinguish these second loans down the road…and of course no journOlist follows up with questions on that aspect..

The good news is perhaps we can get the mortgages modified in the hard hit areas, cough cough, Sunbelt, cough cough….

WSJ:

Under a new program, the government will pay mortgage servicers $500 upfront and $250 a year for three years for successfully modifying a second mortgage, such as home equity loan. Separately, the administration will unveil a schedule of incentives for holders of second mortgages to extinguish those liens voluntarily, the official said.

-snip-

Some of the largest U.S. banks, including Bank of America, Wells Fargo and J.P. Morgan Chase, have already agreed to sign on to the program, the official said. …

…Under the program, servicers must agree to modify all second mortgages where the first mortgage has already been modified. To qualify for payment, servicers must extend the term of the second mortgage and reduce the interest rate to match the first mortgage. Then, the government will share the cost with the servicer of reducing the rate down to 1% for amortizing loans and 2% for interest-only loans.

Borrowers will receive payments of up to $250 per year for as many as five years if they stay current on the loan. The payments will be applied to pay down principal on the first mortgage…

…The administration will announce Tuesday a $2,500 upfront payment to servicers that refinance borrowers into the program. Meanwhile, lenders that originate the new loans will receive $1,000 a year for three years, if the loans stays current.

Not bad so far, but wait there’s more, they plan to EXTINGUISH ie FORGIVE the second loans completely down the road…

Legislation to revamp the program is currently pending in Congress. Once those legislative fixes are made, HUD will work on creating a program to extinguish the second liens, the official said.

You read that right, legislative FIXES and  a program to EXTINGUISH second liens. Man, here I am with only one loan. Silly silly MiM. This will pixx people off.

How is it fair or equitable to EXTINGUISH second liens for some people while others struggle along to pay their mortgage on time every month who did not take a second loan?

The ole dichotomy still a problem IMO, we cannot get a bottom in housing until we address these issues but it is not fair the way this is shaping up.  Why can’t these borrowers have their first and second rolled into one and then modify/refi that? That is what most people do when their payments are too high…

I await word on WHO is paying for the EXTINGUISHMENT of the second liens, ie home equity loans…not the taxpayer surely..sorry Shirley…

Will it be ‘voluntary’ ie done through GOVERNMENT controlled CITI or BofA? Is that why we are waiting for HUD to roll it out? and is that why HUD is waiting for ‘legislative fixes’? Is that cramdown as a stick and this is the carrot?

Man shoes keep dropping left and right, a regular Dr Seuss Foot Book happenin’ here…

April 28, 2009. Tags: , , , , , , , , , , , , , , , , , , , , , , , . Economy, FDIC, Finance, Foreclosures, Housing, Obama Administration, Politics, Popular Culture, TARP, Uncategorized. Comments off.

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