Housing: Treasury HAMP/Making Home Affordable Modification Servicer Status Report: just 31,000 mods made permanent
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EPIC fail. Will have video up shortly. Diana Olick broke it down, of the 3 million delinquent mortgage pool in the report, 1 million eligible, then down to 700,000 made trial mods then 30,000 of those FAILED trial mods and 31,000 passed into permanent mod status.
The % they are reaching is laughable (in an hysterical crying and screaming sort of way). The program was supposed to help 4 MILLION HOMEOWNERS. They have helped 31,000. THIS MORNING Geithner was claiming they were making meaningful progress. Gawd help us.
So far the 78 banks and servicers in the HAMP, which represent 85 percent of the total mortgage market, have just over 3 million loans on their books that are at least 60 days past due. So they sent out notices to those 3 million borrowers requesting more information.
A lot of those borrowers (as high as 50 percent) didn’t respond, according to the banks. Some don’t even live in the houses anymore. Gone. Of those that did respond, just over a million had at least the verbally stated income to qualify for a modification under the program. Others were either not owner-occupants, didn’t have the income level, or were unemployed. So 1,032,837 were offered modifications. But only 759,058 modifications were started. Why? Because a lot of the borrowers just didn’t want them. They would rather try to sell the house or go into foreclosure and walk away. Remember, some borrowers are so underwater on their loans, that they will never see equity again, so why bother making any modification payment, even if it is affordable.
Of the 759,058 modifications started, 697,026 are still in the three month trial phase. That’s when you’re supposedly making your monthly payment and gathering all the necessary documentation for the modification. Since the program really kicked into gear over the summer, we didn’t have any numbers on how many succeeded in the trial period and went permanent, until today.
Treasury reports that 31,382 trial modifications are now permanent. It also reports, well I had to do the math because they didn’t put it on the report, but a spokesperson did independently confirm, that 30,650 modifications were disqualified.
“Presumably, the vast majority were either determined ineligible when all their paperwork came in at the end of three months, or they weren’t current on their payments,” the Treasury spokesperson told me….
WOW! Must See TV: Congressional JEC panel ripping Geithner apart: Rep Brady (R-TX) first to ask him to resign: MiM starts Obama economic team “shake-up” watch…
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If you look at UE Tim, the US is substantially WORSE off than it was when Obama took office to answer Timmehs whine….In fact someone should tell Tim, taking him at his word that he believes all measures, any measure of economic activity shows things are better since January, the measure of foreclosures and delinquencies has also more than doubled since Obama ‘took charge’:
Update: 12:10pm EST: uh oh. Kudlow says and Steve Liesman confirms, that Geithner is the most fiscally conservative member of Obamas economic advisers. No wonder we are in a world of hurt! CNBC just ran the Brady Timmeh back n forth so it should come up in a video post shortly. will get it up right away.
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Update: 11:!5am OMG OMG Geithner just threw Seniors unda da bus!! He acknowledges to Brownback that yes the CBO score only works if Congress actually DOES the Medicare cuts and he insists they must and should and will DO THE CUTS. He says the costs have to be reduced, Brownback is saying but why cant we save Medicare? Good grief Geithner is a disaster, you aren’t supposed to tell Seniors they are getting thrown under there Timmeh, Obama will be displeased. Good ad for the GOP though!
WOW!! Excellent!!!! Live feed from CNBC here
I am starting Geithner Fired/Resigns Watch now, there will fer shure be some sort of ‘ Obama economic team shake-up’ to placate the rumblings as they get ready to ask for MORE STIMULUS…They can’t get away with it under Geithner IMO, looks like he is marked as sacrificial lamb, but the Progressives will be no happier with Larry Summers, lol….
Typos abound, getting ready while I do this- TImmeh is red and ranting and blaming Bush and Rep Brady made him acknowledge yes he was head of NY Fed when this collapse happened, and they are cross talking, Brady says the public has lost all confidence in Geithner and he reflects badly on his President, he says at some point Geithner has to take responsibility…ohhh excellent!!
Update: 11:04am EST: Rep. Burgess (R-TX) just said “I don;t think you should quit, you shouldn’t have been hired”. Is that a bus engine I hear idling??? This the Joint Economic Committee and is made up of both Senators and House members, double the fun!! Now Sen Brownback is going off about the health care plan and the Yuan peg…
(FD-MiM is a former AIG employee and shareholder and we have followed Geithner’s handling of the crisis as NY Fed-head closely for two years now, our posts on Geithner, Hank Paulson and AIG are legion. Our previous posts on Geithner and the troubled CITI bailout here and here and here and here and here and even here ….)
This is in keeping with the report in TheHill this morning:
A Congressional Progressive Caucus (CPC) member said there’s “growing consensus” among liberals that Treasury Secretary Timothy Geithner should step down.
Rep. Peter DeFazio (D-Ore.) said Wednesday that he and other liberal House members are becoming increasingly tired of Obama administration economic policies that they say are too focused on maintaining the stability of Wall Street firms and largely ignore “Main Street.”“A growing consensus in the caucus [believe that Geithner should be removed],” DeFazio said on MSNBC this evening, adding that some lawmakers are “considering questions regarding him and other economic advisers.”
DeFazio said that lawmakers have not yet drafted a plan to remove Geithner. The lawmaker also took aim at top Obama economic adviser Larry Summers for furthering many of the same policies favored by Geithner.
“We need a new economic team,” said DeFazio…..
Hey man, live by the populist pitchforks, die by the populist pitchforks. Hard to put that class war genie back into the bottle and it was a HUGE mistake to embolden the populist rhetoric flame throwers in the House…
This drum beat is getting louder. Dodd thinks Geithner is a drag on his polling, lol, and Simmons, Dodd’s GOP opponent called for Geithner’s resignation already:
A former House Republican running for the Senate in Connecticut is calling for Treasury Secretary Timothy Geithner to be replaced over his handling of AIG’s bailout.
GOP candidate Rob Simmons reacted to a report by Neil Barofsky, the inspector general of the $700 billion bailout program, known as the Troubled Asset Relief Program (TARP).
Barofsky’s report criticized the Federal Reserve Bank of New York, which Geithner led during the bailout, for a series of missteps that Barofsky said ended up requiring the government to provide additional support to AIG.
“The report issued yesterday by the inspector general for the TARP program is a deeply troubling account of Secretary Geithner’s failed management of the AIG bailout in which he cost taxpayers $13 billion in unnecessary new debt,” said Simmons, who appears to be the only candidate or office-holder to call for Geithner’s replacement in response to the report.The federal government committed more than $180 billion to AIG, which was crippled by poor investments and trades in credit default swaps, a financial derivative.
Simmons also attacked his opponent, Senate Banking Committee Chairman Chris Dodd (D-Conn.), in the statement calling on Geithner to be replaced.
“The cozy relationships between the bailed-out financial companies and powerful politicians like Tim Geithner and Chris Dodd are exactly why Americans have lost trust in Washington, D.C., and why we need new leadership with the skills and integrity to clean up their mess and get our economy back on track.”…
More great housing news:
US mortgage delinquency rates and the percentage of loans that entered the foreclosure process jumped in the third quarter, with both reaching record highs, the Mortgage Bankers Association said on Thursday.
The percentage of loans on which foreclosure actions were started rose to 1.42 percent in the third quarter, an all-time high, up from 1.36 percent in the second quarter and 1.07 percent in the third quarter of 2008.
…The delinquency rate for mortgage loans on one-to-four-unit residential properties rose to a seasonally adjusted rate of 9.64 percent of all loans outstanding as of the end of the third quarter of 2009, up 40 basis points from 9.24 percent in the second quarter and up 265 basis points from 6.99 percent one year ago, the MBA said in its National Delinquency Survey. The delinquency rate broke the record set last quarter. The records are based on MBA data dating back to 1972.
…The percentage of loans in the foreclosure process at the end of the third quarter was 4.47 percent, an increase of 17 basis points from 4.30 percent the second quarter of 2009 and 150 basis points from 2.97 percent one year ago.
The combined percentage of loans in foreclosure and at least one payment past due was 14.41 percent on a non-seasonally adjusted basis, the highest ever recorded in the MBA delinquency survey….
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Update: Oh this is rich, Andy Stern and SEIU are having an ‘end too big to fail’ rally outside Golden Slacks, it sounds like they are actually supporting the Dodd position which the WH is NOT supporting but we know Andy Stern is there (WH) more than anyone else…so are they ‘accidentally’ using the same words as Jamie? Are they helping to keep Golden Slacks’ negative profile so high they don’t bid on taking any of the assets in the FDIC bank seizure sales? (Jamie is against the Dodd too big to fail legislation because he reportedly wants to buy some of those assets and Golden is a competitor…is the WH not really against the Dodd legislation and lying to Jamie? Is Stern just greedy or is this planned? man oh man…)
…a couple hundred of them — led by Service Unions International Union president Andy Stern — plan to gather outside of Goldman Sachs’ Washington offices Monday morning to protest the firm’s mega-bonuses, and demand the end of the “too big to fail” doctrine, according to a press release.
The event will be held outside 101 Constitution Ave. N.W., an office building that’s home to many of the most powerful lobbyists and corporations in town, including Goldman. It’s also where you can find POLITICO’s Capitol Hill bureau (in the basement).
Among their demands, the protesters will say that Goldman bankers should donate their reported $23 billion in bonuses to foreclosure prevention programs….
wow. We supported Jamie Dimon for Treasury Secretary. Face it Geithner already gave billions to the banks via AIG and CITI, may as well have a TOUGH fox guarding the hen house, and Jamie is the toughest. Paul Volcker who gets wheeled out for the occasional photo-op is clearly being ignored, treated like the ‘crazy Uncle’, as Charlie Gasparino puts it. Obama is listening to only one banker it seems, Jamie who has vested interests in keeping things as they are.
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Airtime-Fri. Nov. 13 2009 – 12:50 PM ET – CNBC’s Charlie Gasparino has the details on whether Jamie Dimon is too powerful.
Jamie Dimon- ‘No Bank Should be Considered Too Big to Fail’
…Dimon, in a Washington Post opinion piece, said the government shouldn’t provide artificial life support to banks that don’t perform. “The term ‘too big to fail’ must be excised from our vocabulary,'” Dimon wrote in Friday’s Post.Yet he said it shouldn’t be the size of the institution that drives the new regulatory policies being considered in Congress but rather their ability to manage risk and provide the best services for customers.
Update: Marty Feldstein agrees with MiM on the GDP and double dip (too bad he endorsed Obama and later let himself be used as a tool like Volcker)
Third-quarter growth “was boosted by the various fiscal stimulus policies,” Harvard University professor Martin Feldstein said in an e-mail. “The danger remains of a serious slowdown after this and a possible double dip” of the economy in 2010, he said.
*Montage by Delta1111111
In an apparent reversal of sentiment from that expressed by HUD chief Shaun Donovan in his testimony to Congress just weeks ago when he said it was very expensive, the WH is endorsing the extension of the homebuyer tax credit (details at end of post).
IMO this policy reversal, combined with TOTUS’ failure to laud the GDP data today (he merely commented that he is not satisfied as Americans need work) can mean only one thing.
The internal economic projections of the WH team led by Romer rolling stimulus expectations waaaay back last week, are WAY WAY WORSE than expected. They see the double dip coming and are trying to get in front of it with more stimulus spending in an extended homebuyer tax credit which will do what clunkers did, cannibalize future sales and leave a wider gap in the future with additional deficits.
So MiM’s forecast for artificial GDP bumps in 3Q and 4Q ’09 may need to be extended into 1Q 2Q 2010 if they are going to keep throwing money at anything that will give a temporary boost to GDP. Of course the coming tax hikes they are building into the system with the deficit they are growing will CRUSH our economy for years to come but that seems to be beyond their timeline, and thus not their concern.
Clearly the goal is political with everything they do, I guess that comes from Rahm. But that being said, I would expect they are playing dice hoping to keep GDP artificially high going into 2010 Congressional mid terms.
Of course since it is not organic GDP growth jobs are not coming with it so I don’t see the payoff in this policy unless they think Americans will look at stock markets and GDP and feel happy despite being unemployed and foreclosed upon? DOW right now, 3:14 pm up 200. It is high on sugar and our economy is a diabetic on dialysis over here! Today is the anniversary of the 29 collapse btw…there was a HUGE rally after that followed by the utter collapse of the economy as a CNBC guest notes now…HA he said sugar high! I said that! I will add this video when CNBC posts it 🙂
Question is, can they pull off this GDP stimulus spending for that long while simultaneously driving down the dollar without a total collapse of our economy from the CRUSHING deficit? We shouldn’t have to even pose that question. This is like giving the car keys to a raging alcoholic after an open bar at their ex’s wedding.
Doubling down on bad medicine. I am past girding, I am bracing for impact (sadly no Sully at the wheel, we have Pelosi and Reid)..
Original Post: In an apparent reversal of sentiment from that expressed by HUD chief Shaun Donovan in his testimony to Congress just weeks ago when he said it was very expensive, the WH is endorsing the extension of the homebuyer tax credit:
The nation’s top housing official expressed doubt over the need to extend the $8,000 tax credit for first-time home buyers, and said that the Obama administration was reviewing whether the additional cost of extending the credit was worth any benefit in home sales.
Shaun Donovan, the secretary of the Department of Housing and Urban Development, told a Senate hearing on Tuesday that there was “clear evidence” that the tax credit had benefited the housing market. But he said that the “real issue” in considering an extension was whether an extension was worth the cost to the government in lost tax revenue.
The actual cost of the credit won’t be known “until Americans have filed their tax returns,” he said. “And so, we feel it’s very important within the administration that we gather as much data as we possible can in advance of that before we make a final decision.”
This was just 2 weeks ago folks!
Mr. Donovan said that he understood that the impending expiration of the tax credit meant that the administration needed to make a decision soon so that the market could plan accordingly. Mr. Donovan said he didn’t believe a “catastrophic decline” in home sales would result if the tax credit were allowed to expire on Nov. 30, though he said that an expiration could have some “negative implications” for the market….
And today they send out Geithner to say EXTEND THE TAX CREDIT!
The Obama administration endorsed plans to extend an $8,000 tax credit for first-time homebuyers, saying it is helping stabilize the nation’s housing market.
The tax break, enacted earlier this year as part of an economic stimulus package, has “brought new families into the housing market and contributed to three consecutive months of rising home prices,” Treasury Secretary Timothy Geithner said today in a statement. The tax break will expire Nov. 30 unless Congress intervenes.
Senate Democrats have announced plans to extend the credit until April 30 while expanding it to include higher-income Americans and some who already own homes.
Senate Finance Committee Chairman Max Baucus said today the new plan would offer a $6,500 credit for homebuyers who have lived in their prior residence for at least five years. Couples earning up to $225,000 and individuals up to $125,000 would qualify for the break, Baucus said. That’s up from the current $75,000 limit for individuals and $150,000 for couples.
“The success of the American economy is closely tied to the success of the housing market – by helping to stabilize the housing market, the homebuyer tax credit has helped to shore up the economy as it begins to recover,” said Baucus. “This would enable an even greater number of potential homebuyers to take the credit.” Millions of renters earn more than $75,000, he said.
Here’s a question for good ole Max who initially balked at this spending: What will happen to all those rental property owners whose tenants you claim will buy houses? What about the people who work for those property owners? Unintended consequences. All the government can do is steal one man’s profit and give it to someone else. They do not CREATE anything. Only private capital CREATES JOBS. My God I sound like Larry Kudlow. My dad is smiling in heaven.
Democrats have been pushing to include the provisions in an unemployment benefits bill, which has been held up by a disagreement with Republicans over other proposed amendments….( read the whole thing).
Update: CIT Group files bankruptcy; No Government aid for CIT….Thursday Market Mover: Paulson on the Hill…
Update: 11/2/09: Bad, sad news, CIT Group went belly-up this weekend despite the 2B taxpayer infusion and the Carl Icahn offer. Bad news for small business. But it is an attempt to dump the debt and live on, so maybe it will live to fight another day.
CIT Group Inc. filed for bankruptcy protection Sunday, in a final attempt to restructure and keep the doors open at the century-old commercial lender.
Now, the lender to nearly a million small and midsize businesses must maintain its customer base as it tries to rehabilitate under Chapter 11 protection. Most financial firms sell off assets or liquidate in bankruptcy amid fears that customers will draw down credit lines and spark a run on the bank.
But CIT garnered support from about 90% of voting debt holders for a prepackaged reorganization plan that could allow the lender to speed through Chapter 11 and emerge with a new business model by year’s end. Under the plan, bondholders will exchange their debt for new debt that matures later, as well as nearly all the equity in a reorganized CIT.
The bankruptcy stay would eliminate some $10 billion in debt from the lender’s balance sheet, the company said. CIT has been weighed down by more than $30 billion in bond debt.
A $2.3 billion taxpayer bailout extended to CIT late last year under the Bush administration will be wiped out in the bankruptcy. Common shareholders will be wiped out, too.
The plan is among the first attempts to restructure a financial firm in bankruptcy court and have it emerge relatively intact. The board approved CIT’s decision to seek Chapter 11 protection in a meeting Sunday. “The board appreciated that this is a [historic] sort of filing,” said a person close to the lender. “It is clearly unprecedented.”…
Charlie Gasparino is reporting on CNBC’s Kudlow that Sheila (Bair of FDIC) brought the hammer down and drew the line in the sand saying NO MORE BAILOUTS…shxt it would have to be on small business that the money train dried up eh?
Well, we love Sheila here at MiM (we wanted her or Jamie Dimon of JPMC for Treasury)and Timmeh was saying from Saudia Arabia that he was confident they would find a way to do the bailout, so we enjoy it when his toes are stepped on, bitter and petty that’s us today fer shure, BWAAAAHAAAA.
Hope Sheila’s foot met Timmeh’s axx on this one, FDIC should have the too big to fail wipeout authority IMO not the Fed and for Gawds sake not the Treasury….
CNBC on imminent CIT bankruptcy following FDIC and Treasury decision not to bailout…
… CIT Group, a major lender to small- and mid-sized U.S. businesses, said on Wednesday that talks with the government to bail out the company had ended, a development that could make bankruptcy likely.
…”Discussions with government agencies have ceased,” the New York-based company said in a statement. “There is no appreciable likelihood of additional government support being provided over the near term.”
The announcement came after last-ditch talks in which Treasury Department had been concerned about a worsening liquidity crunch at CIT over the last few days, and that government aid would not put the lender on a path to recovery….
Tomorrow BIG NEWS will be HANK PAULSON testifying on Capitol Hill about the Merrill BofA shenanigans, should be lots of fun. Hanks is the man who handed free market capitalism over to the government and then retired with hundreds of thousands of Golden Slacks shares…..Hank Hank Hank, when he sees whatis happening now how does he feel? He opened this door and TOTUS swagga’d through it….
Our MANY posts on Hank, Timmeh, AIG, Merrill, BofA, CITIBANK, Sheila, are too numerous to link…
Smashing Pumpins fan made video with footage of Tours in France, courtesy of buissonland
Okay Ben is under attack, and like it or not, with him the independence of the Federal Reserve. These emails were leaked to CNBC by Congressional Investigators.
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Insight on the emails leading up to the Bank of America-Merrill deal, with CNBC’s Scott Cohn; Joe diGenova, diGenova & Toensing; and CNBC’s Rick Santelli, Charlie Gasparino & Larry Kudlow.
Team TOTUS would like nothing better than to get Larry Summers in there in 2010, and Congress is lending a helping hand, issuing subpoenas and scheduling hearings, taking testimony from Ken Lewis. AG Cuomo was all over this commensurate with his role as NY AG in training to be Governor…this is going nowhere good…
Sadly I agree, I think Bernanke will be replaced by Larry Summers and if so, Summers will cave to political pressure unlike say Volker in the Bush I era, and he will fail to raise rates or sell MBS’ when necessary, thus we will hit it the hard way, roll a hard 6 as Adama would say….
Smoke ’em if you got ’em, it’s gonna be a looooooong rough patch..
At the very end here of Part 2 of the interview Faber is 100% sure of hyperinflation, continues into Part 3. ..