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A1 |
No doubt that's how it's being played because it shifts the blame from the real personal responsibility issue ... Corporations gave free money to anyone with a heart beat, then sold that high interest paper to others. Now those ["smarter" than the average bear] investors who, like with Enron of the 2000's, and Tech stocks of the '90s and Junk Bonds of the '80s, bet and lost are seeking a bail-out.  Ivan Boesky and Mike Milkian went to prison for doing the same thing, the entire mortgage industry did.
Can anyone say inflation?!? |
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C4 |
Some foreclosures seen due to shoddy construction
By Maya Roney Business Week Updated: 7:08 p.m. CT Aug 22, 2007 She wasn't an investor. She didn't have a subprime mortgage. But when Jordan Fogal's house became uninhabitable, the 62-year-old grandmother says foreclosure became her best alternative. Fogal's troubles began when she and her 72-year-old husband, Bob, moved to a new housing development near Houston in 2002. That first night in the new house, the dining room ceiling collapsed. Bob had pulled the plug in the Jacuzzi tub upstairs, and 100 gallons of water came crashing through the ceiling downstairs because the plumbing drains were not connected. "That was a preview of coming attractions," Fogal says. Later, the roof and windows leaked, the yard flooded, the shower walls started bowing out, the floor in the kitchen started sinking, and mold began to grow all over the house. The smell was terrible, she recalls, and eventually Fogal's doctor ordered her to leave the house because of the dangerous mold levels. A construction company hired by the Fogals estimated that it would take $150,000 to repair everything. "I could afford my mortgage payment, but I couldn't afford $150,000 in repairs," says Fogal, who had a 30-year fixed-rate mortgage at the time. The home — appraised at $408,000 the day the couple bought it — ended up selling for $234,000 at a foreclosure auction. "All of this time, I was begging the builder to fix these problems," Fogal recalls. But, she says, they only showed up to about 25% of the appointments she made. "That's absolute nonsense," says Tom Thibodeau, president of Tremont Homes and then-president of the Fogal home's builder, Tremont Custom Construction. "We tried everything we could to fix this house, and she refused it. She only wanted us to buy the house back." The only original problem with the Fogals' house, Thibodeau says, was a roof leak that was neglected and led to a myriad of other problems. "She would like everyone to believe the house was foreclosed on because of the defect," he says. "But by neglect, she let the leak go and other problems manifested from the leak." More than a subprime problem? Fogal's case is not an isolated incident. Greg Cole, a homeowner in Georgia who runs a gripe site at georgiamoldhome.com, says he is on the brink of foreclosure after dealing with structural problems and leaks that have led to elevated mold levels. He, his wife, and his two children now take antibiotics every day, he says, because of the high level of mycotoxins — a toxin produced by fungi — in their blood. Elizabeth Dziedzic, a Realtor in Orange Park, Fla., says the deficiencies in her home make it impossible to sell for the amount it would take to pay off her mortgage balance. "There are only few events that are as devastating to a family as the loss of the family home to foreclosure," she says. "I guess this would be a price my family will pay for trying to achieve the American dream." Foreclosures are up 93% from last year, according to Irvine, Calif.-based Web site RealtyTrac. At the same time, questions are arising as to whether construction quality suffered as homebuilders worked at lightning-fast speed to keep up with demand during the housing boom. It has become increasingly common for homeowners across the U.S. to share personal stories about defective construction through Web sites and blogs. "Everything you read says that the rise in foreclosure has to due with subprime lending," says Nancy Seats, president of Homeowners Against Deficient Dwellings, a nonprofit consumer protection group for homeowners dealing with defective construction. "But [defective construction] absolutely has something to due with the rise in foreclosures. There were absolutely investors that pushed up the price of housing, but there is no question that there are home buyers that were taken in and scammed big-time." Why not just sue your builder when an irreparable problem arises? Homeowners usually don't have the right to. Most new-home sales contracts state that the customer must go through arbitration before they can even think about bringing their complaint to court. There is little question that foreclosures are up, but it's difficult to discern if construction problems are a key reason. Web sites such as RealtyTrac and Foreclosures.com do not keep track of the reasons why people are defaulting. "While it certainly is adding to the foreclosure inventory, I hesitate to say that it is driving the rise in foreclosures," says Rick Sharga, vice-president for marketing for RealtyTrac. Fueling the foreclosure spike, Sharga says, are the slowdown in home sales, massive defaults on subprime and adjustable-rate mortgages, and regional conditions such as overbuilding and speculation. Dissatisfaction with new homes is rising by some accounts. According to the 2006 Construction Quality Survey by Portland, Maine-based consulting company Criterium Engineers, the number of new homes with "significant problems" rose to 17% in 2006 from 15% in 2003, with individual projects in some areas having defect rates as high as 50%. Water intrusion continued to be the No. 1 reported problem, with poor installation of roofs and windows reported to be the primary cause. Living the nightmare According to a study conducted in April and May by Rating Insights, a consulting firm that runs the consumer-rating Web site Rateyourbuilder.com, 14% of consumers expressed dissatisfaction with their builder and 20% said they would be unlikely to recommend their builder to friends or family. "These percentages are not much different from what consumers report in other industries," says Rating Insights President Jonathan Smoke. However, "even though the percentages may stack up well to most industries, a nightmare experience with a home is not as easy to recover from as a bad experience with a telephone company or even an automobile manufacturer." For Jordan Fogal – who receives phone calls and e-mails each day from homeowners across the country facing foreclosure because of building defects — the effect of shoddy construction on the greater housing market is difficult to downplay. Fogal has spent the past three years living in a two-bedroom apartment, devoting all of her time to helping out other homeowners by posting about her experience on the Internet and picketing in front of her builder's new developments. This past June, she testified before Congress about the unfairness of binding arbitration agreements. "I have not had a Christmas tree, I have not had the grandchildren over," Fogal says. "We have nothing but boxes, we live in boxes. But all I do is listen to these people all day long and I think, 'O.K., I can't stop.'" Copyright © 2007 The McGraw-Hill Companies Inc. All rights reserved. URL: http://www.msnbc.msn.com/id/20393984/ __________________________ Africa, my Africa, I have never known you but my face is full of your blood. - David Diop |
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A1 |
The other group that caused a lot of the market problems, but seem to be avoid much of the media blame are the investors. I'm not talking about the second home so we can rent it out investors, but the buy it today so I can flip it tomorrow investors.
These are the people that bought houses with no intention of holding on to them. These are the folks that used the No Down-Stated Income-No Docs novelty mortgage products, betting that they could flip the house after maybe 6 interest only payments and walk anyway with $20-30K. These are the folks that are walking into the banks with the keys and walking away with no regrets. I'll pull the numbers, but this group's foreclosure rate is far higher than the [blamed] homeowner whose adjustable rate priced them out of the house. |
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B2 |
Who's going to be buying the foreclosed homes if the industry actually follows through and tightens up lending criteria.
I hear, anecdotally, that even folks with A-paper are going to have more stringent lending criteria to meet. ------------------------------ DOMS is my friend.  |
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A1 |
True ... even A-paper credit with 20+% down are gonna have difficulty finding financing because the bottom-line is the industry has been so lax, the secondary market is simply not buying any loans.
I'm thinking this'll last about a year or so ... just long enough for the majority of those with shaky ability to pay to be foreclosed on. I was talking to a left-leaning economist friend who put something really scary on my mind. She offered that we are witnessing/about to witness one of the biggest re-distribution/acquisition of wealth in modern/post-guilded age history. She predicts that with the numbers of forecloses, there will be a forcing down off prices [over-supply] and the tight credit [in the housing market] will force down prices even further [lack of demand, well actually ability to buy]. She's talking 1990's level] All of this will result in unprecedented cheap housing, but the only one's who will be able to take advantage of this perfect storm will be the already rich ... those who can put 50% down, regardless of their credit rating.  But the upside, if you want to call it that, is if you already own a house and are able to bank some [a lot of] cash over the next year or so, or you can form an investment group with access to cash, you too will be in the position to literally make out like a bandit, or better yet, like a robber baron. |
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A1 |
wow! Question: why are the banks/lending institutions being bailed out, but not the people who are losing the homes? I heard BankofAmerica will pump 2BILLION into Countrywide so this means countrywide and bank of america will have liquidity injected into them by the feds, they'll bail each other out, they'll tighten up on lending, thus keeping more cash, AND, they'll have the properties which were foreclosed on as security? *sniff* *sniff* something stinks When we speak we are afraid our words will not be heard or welcomed. But when we are silent, we are still afraid. So it is better to speak Audre Lord |
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C4 |
Because all of the officers at these companies are friends. They take care of their buddies. They move between all of these companies or have worked together at one point or another. The company that I work for, the CEO used to be an officer at Bank of America. Some of the executives that work here use to work with him at B of A. The people who are losing their homes are of no consequence to this sharks. We are all expendable to them. And that goes for the employees at the company as well.
Just remember, the federal government doesn't have any money. That is our money that they are giving these corporations. We are bailing them out. Remember Chrysler back in the '80s. We bailed them out. Something does stink, all of those back room deals late at night in the halls of congress. We need to throw all of that trash out of both houses.
__________________________ Africa, my Africa, I have never known you but my face is full of your blood. - David Diop |
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C4 |
negrospiritual, Here is the story that you were referring to:
Countrywide Gets Boost From BofA LOS ANGELES (AP) - The infusion of $2 billion from Bank of America Corp. should help shore up sagging Countrywide Financial Corp. as it tries to outlast the credit crunch squeezing Wall Street and the mortgage industry, analysts said Thursday. The deal, disclosed late Wednesday, gives the nation's largest mortgage lender breathing room as it tries to navigate the U.S. housing downturn. "We believe this investment in Countrywide will spark a rally in the residential mortgage finance sector," Stephen Laws, a Deutsche Bank analyst, wrote in a research note. Still, analyst Paul Miller Jr. with Friedman Billings Ramsey noted that "Countrywide is not completely out of the woods." Despite the boost in capital, Countrywide is likely to have a tough time staying profitable given the overall bleak housing forecast, as home values fall and adjustable mortgages reset and raise the specter of more defaults, concluded Chris Brendler, an analyst with Stifel Nicolaus & Co. Inc. The Bank Of America deal helped boost shares of Countrywide as high as $24.46 on Thursday. The stock ended up gaining 20 cents to close at $22.02. Just a week earlier the stock hit a 52-week low of $15. Bank of America shares rose 18 cents to $51.83. Countrywide's chairman and chief executive, Angelo R. Mozilo, said in a statement Wednesday that the Bank of America investment would help position the company for future growth. He told CNBC on Thursday that Countrywide's balance sheet needs to be stronger but added, "there is no more chance for bankruptcy today for Countrywide than there was six months ago, a year ago, two years ago, and when the stock was $45 a share." The executive also said he believes the housing slump, marked by increasing delinquencies and foreclosures, will trigger a national recession. "I know I've been proven wrong so far," Mozilo said. "Equity's disappeared -- I mean, equity's gone." In a regulatory filing, Countrywide said Bank of America has the right to match any offer for Countrywide put forward by a third party. Mozilo, however, dismissed talk that the deal could be a prelude to an eventual sale of Countrywide to the banking giant. Meanwhile, Calabasas-based Countrywide came under fire in Washington, D.C., from angry borrowers at a news conference organized by the Neighborhood Assistance Corp. of America, a nonprofit community advocacy group that offers below-rate mortgages and refinancing. The group was planning to ask the Office of Thrift Supervision to force Countrywide to restructure its existing loans. Twelve people from around the country who said they were Countrywide customers recalled getting sweet-talked and misled by Countrywide agents only to face jacked-up rates and foreclosure threats after falling behind on payments. One borrower, Cynthia Bryant of Pomona, said Countrywide threatened her with foreclosure. "I read in the paper today where they received billions to bail them out. But what has Countrywide done" to bail out their borrowers? Bryant asked. A call to Countrywide seeking comment was not immediately returned. Countrywide last week borrowed $11.5 billion from several dozen banks so it could keep making home loans. Its bottom line had suffered as defaults increased on subprime mortgages to borrowers with shaky credit histories, and the problems stretched to other credit markets. In the deal with Bank of America, the Charlotte, N.C.-based bank acquired $2 billion worth of nonvoting, convertible preferred stock in Countrywide yielding 7.25 percent annually. The shares can be converted into common Countrywide stock at $18 a share, with certain restrictions. For example, the deal prevents Bank of America from trading any shares converted from preferred stock for 18 months and from acquiring beneficial ownership of more voting shares in the company. If Bank of America were to convert its stock under Countrywide's current share count, it would hold as much as 17 percent of Countrywide shares and become the company's largest shareholder. Currently, AllianceBernstein LP owns the most Countrywide shares -- about 11 percent of the company, according to documents filed with the Securities and Exchange Commission. http://news.moneycentral.msn.com/printarticle.aspx?feed...=20070823&id=7362892 __________________________ Africa, my Africa, I have never known you but my face is full of your blood. - David Diop |
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C4 |
Maybe the wagons are beginning to circle.
Central banks are stealing from the average citizen What happens when fiscal irresponsibility gets rewarded with bailouts? You get more fiscal irresponsibility. Let's stop rescuing greedy financiers and investors. By Bill Fleckenstein As regular readers know, I have been a longtime critic of the Federal Reserve. Not too far back, that view was a decidedly minority one. But as our credit bubble undergoes an ugly unwinding, it's dawning on folks that central banks lie at the epicenter of the problem. Andy Xie nailed it in Tuesday's Financial Times, which is why I've chosen to begin my column with quotes from his article "It's time for central banks to stop bailing out markets." The bailout stops here He writes: "The global credit bubble is bursting. This bubble is primarily leverage financing for owning risky assets. The people who were responsible for what happened played with other people's money, marketed arcane financial products with false promises of fat profits, but stuffed their own pockets with big bonuses. Neither these masters of the universe nor their greedy but naive investors deserve to be bailed out. They deserve what is coming to them. "The central banks should focus on price stability, not financial market stability, and should provide liquidity only to contain the multiplier effect of the bubble bursting on the economy. Nor should central banks stimulate to avoid recession at any cost. Business cycles are not bad. Excesses must be followed with cleansing. . . . "Markets have been taking more risk than they should because they believe that central banks will come to their aid during times of crisis, like now. The penchant of Alan Greenspan, former U.S. Federal Reserve chairman, to flood the market with liquidity during financial instability is the genesis of this 'central bank put.' As long as this expectation remains, financial bubbles will occur again and again. Now is the time to act. Let the crooks go bankrupt. Central banks should bury the Greenspan 'put' for good." All I can say is amen to that -- and hope this is how events turn out. Of course, given how central banks have behaved in the past decade, I'm not holding my breath. But perhaps this article in the Financial Times will help crystallize for them what it is they need to do. It's always possible that this time around, the central banks will let capitalism work. That could help hasten the cleansing process -- aka creative destruction -- which would be a positive development, for sure. Illiquid versus insolvent Similarly, folks should read what Nouriel Roubini says at RGE Monitor about the current crisis, because I think he hits the nail on the head. Rather than being a liquidity crisis like the 1998 failure of Long-Term Capital Management -- which was more like a run on the bank and was stemmed by the powers that be -- Roubini describes the current situation as a "liquidity crisis that signals a more fundamental debt, credit and insolvency crisis among many economic agents in the U.S. and global economy." For folks in a hurry, the last paragraph of Roubini's piece captures the essence of the problem. In the meantime, the last few lines nicely sum it up: "We are indeed at a 'Minsky Moment' and this recent financial turmoil is the beginning of a much more serious and protracted U.S. and global credit crunch. The risks of a systemic crisis are rising: Liquidity injections and lender-of-last-resort bailout of insolvent borrowers -- however necessary and unavoidable during a liquidity panic -- will not work; they will only postpone and exacerbate the eventual and unavoidable insolvencies." Turning to the intersection of big-bank and little-guy bailouts, a contact in the housing ATM notes that more folks than ever are electing not to pay their mortgages. Apparently, the thinking goes something like: "Gee, if some folks are not paying their mortgages and are going to get bailed out, why shouldn't I? Particularly if I have a little equity in my house." That is the danger that's been created by the government talking about bailing out the housing market: A multitude of people decide to join the party and not pay. This is a slippery slope we've been going down for a long time, and it looks at long last like the problem will be too big to bail out. Bottom line: The dislocation and pain are starting to be felt throughout the financial system. We are headed to a lot of financial turmoil, and there's no getting around that. Could the fall of Rome hit home? Lastly, in a sad commentary about where we are as a country, U.S. Comptroller General David Walker was quoted Tuesday (also in the Financial Times), as follows: "Drawing parallels with the end of the Roman empire, Mr. Walker warned there were 'striking similarities' between America's current situation and the factors that brought down Rome, including 'declining moral values and political civility at home, an overconfident and overextended military in foreign lands, and fiscal irresponsibility by the central government.' " Unfortunately, it seems to me that he is dead right. __________________________ Africa, my Africa, I have never known you but my face is full of your blood. - David Diop |
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A1 |
That was so delicately put AC ... NS, the banks are getting bailed out because [from the government's perspective] if you are ruined, so what? If B of A is ruined, there will be about a million more of you's ruined. That's the excuse. And as AC said ... the fact that all these players went to the same schools, are members of the same fraternities/societies, are golf buddies, used to work at each others companies, and sit on each other's boards does hurt either. But as Donald Trump said, "If you owe the bank $10,000 and don't have it; you're screwed. If you owe that same bank $10,000,000 and don't have it; the bank is screwed. |
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C4 |
Here's another area of concern that the media reports failed to mention when they were talking about the abundance of foreclosures. This speaks more to your point Kweli4Real about the investors.
OrlandoSentinel.com Boom of condo crash loudest in Miami Maya Bell Sentinel Staff Writer August 27, 2007 MIAMI The champagne-popping days are over for Natalie and David Luongo, who banked enough money flipping a South Florida condo three years ago to stage a $100,000 wedding. Now the couple are spending restless nights wrestling with the question that looms like a guillotine: Should they walk away from the $117,000 deposit they plunked down on another investment condo in the ritzy Miami-Dade enclave of Bal Harbour? Or should they close on the one-bedroom unit, which is similar to others now on the market for less than the $585,000 they agreed to pay? "It's painful and scary," Natalie Luongo, 31, said. "We saw the frenzy, and we bought in. Now we're paying the consequences." Just how many other speculators face the same dilemma in the nation's most glutted condo market will become clear during the next two years. That is when 25,000 new condo units, most of them rising in or near Miami's downtown, will flood an area already saturated with 23,000 condos listed for sale. An additional 40,000 units have been approved, but analysts doubt the majority will break ground. (See map with condo locations.) Orlando and other Florida cities -- Naples, Fort Myers, Tampa and Sarasota among them -- also have huge condo gluts. With 4,440 condos listed for sale, Orlando has an unprecedented 29-month supply, and last month sales plummeted 64 percent lower than a year ago. But Miami, with its unmatched volume and untold number of speculative buyers, is ripe for the hardest fall in the U.S. "Miami is the poster child for the condo bust," said Jack McCabe, CEO of McCabe Research & Consulting, a real-estate market-analysis firm located in Deerfield Beach. "There are probably only two cities in the world with more construction: Shanghai and Dubai. Unfortunately, there is going to be a lot of foreclosures . . ., and developers, lenders, title companies and real-estate companies will go under." Many analysts, McCabe among them, predict the area's condo collapse will drag the rest of the state into recession. Other experts scoff at that notion. But nearly all agree grim times lie ahead. Usually joyous milestones, closings in Miami are about to become somber days of reckoning for electricians, waiters, retirees and other amateur speculators who counted on making a quick killing in a market they thought would rise forever. No one knows how many units speculators bought. But as early as 2004, McCabe and Lew Goodkin of Miami-based Goodkin Consulting warned that up to 70 percent of the condos rising in Miami were being snapped up by people who didn't plan to hold on to them, much less live in them. That was evident from the hordes who camped overnight, fought over lottery numbers, even paid homeless men $20 and a pack of cigarettes to hold their places in long lines, all for the chance to put 20 percent deposits on condos that existed only in brochures. The frenzy for some projects was so fevered that some developers raised their prices hourly. "It was a nightmare. Lines around the corner. People screaming into phones. I would look at them, and think, 'You don't know what you're doing,' " said Mark Zilbert, president of Zilbert Realty Group. Many told a similar story: They had a friend who made $100,000 flipping a new condo, and they planned to ride the same wave of escalating prices. All they had to do was put down $60,000 on a $300,000 pre-construction unit and resell it when the value climbed to $400,000 -- before the building opened, and before closing and mortgage payments, maintenance fees, insurance and taxes kicked in. That meant anyone could risk $60,000 and pocket $100,000 without actually buying anything. Some investors were experienced players like Barry Beschel of Aventura. After the dot-com stock-market crash in 2000, he said he had no trouble persuading his buddies to park their money in Miami's sizzling condo market. "All my guys in New York were like, 'Yeah, flipping condos in Miami.' It was a sexy commodity, and it was fun to make money," Beschel said. It was also easy. Beschel, 50, said his group followed well-known developers such as The Related Group's Jorge Perez to their next project. The king of Florida's condo market, Perez has built or manages more than 55,000 units in the state and is building at least nine new towers in Miami as well as a 441-unit, luxury condo hotel in Celebration. From 2001 to 2005, Beschel said his group bought about 50 pre-construction condos, sometimes 10 or 12 at a time. They would pay about $300 a square foot and, once the building sold out, return the condos to the developer, who would resell them at $350 a square foot. The difference between the original contract price and the new one -- $100,000 on a 2,000-square-foot unit -- would go to Beschel's group, minus a commission. "The developer would take his commission, and we'd take our profit and everybody was happy. When the market was cranking, it was a brilliant business model," Beschel said. But beginning in 2006, Goodkin said, it became clear the market was saturated. Speculators, at least the wise ones, had fled. Buyers stopped walking through the sales-office door. Some developers halted resale programs to concentrate on their own inventory. And whoever held a contract was stuck -- with prices at their peak. Now, foreclosure filings are up by 30 percent in greater Miami over last year. For Beschel, whose group still holds contracts on two condos with falling values and looming closing dates, financial ruin isn't a worry. He figures his group made "a few million dollars," so walking away from two $100,000 deposits is no big deal. But for untold others, such as the Luongos, losses could be devastating. Owners of a gourmet shop, the transplanted New Yorkers poured their life savings into deposits on four condos they had planned to flip for a quick profit. The plan worked for a one-bedroom condo conversion at The Residence in Hollywood. They agreed to buy it in 2004 for $207,000 and sold it before closing for $330,000. But they were forced to close on a condo in Boynton Beach, where they now live, and they face the prospect of losing nearly $200,000 they put down on two condo conversions at the Harbour House in north Miami-Dade County. One is a $350,900 studio, which Natalie Luongo said is smaller and in a different location than the one she agreed to buy in December 2005. It is the subject of litigation. The other is a $585,000 one-bedroom unit similar to others now available for about 25 percent less. As the September closing looms, the Luongos are distraught. If they can't secure another mortgage, the decision will be made for them. They will have to walk away from their $117,000 deposit. But if they secure financing, they know they will be stuck with a property that could be as difficult to rent as it is to sell. Gregg and Mary Mullins, 70-year-old retirees living near Fort Myers, learned that the hard way. Last month, they finally rented out the two-story $885,500 penthouse they closed on last year in Blue, a concave tower overlooking Biscayne Bay. But the $2,800-a-month rent they're collecting is less than half their monthly mortgage payment, maintenance fees and property taxes. Yet, as Mary Mullins said, something is better than nothing. The couple never planned to live in the condo, but jumped at buying it at pre-construction prices in 2004 after friends shared a familiar story. "They said they made lots of money, so they told us to try it and maybe we could make lots of money, too," Mary Mullins said. "But that didn't happen. We don't know what happened." A sheepish Tom Leon says he knows. The retired businessman from Illinois said he knew he had made a mistake about six months after he put down $200,000 on two $500,000 condos at the end of 2004. "Every 2 inches, I'd see another [construction] crane, and I knew: There is no market that can absorb these many units," said Leon, 72. "It doesn't take a rocket scientist to say, 'Gee, who's going to live in all these buildings?' " http://www.orlandosentinel.com/business/orl-condobust2707aug27,0,2001796.story __________________________ Africa, my Africa, I have never known you but my face is full of your blood. - David Diop |
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C4 |
I'm not sure what I think about this. I guess we will have to wait and see what the details really are. I'm always skepticle when the government tries to step in and fix problems. They don't have a very good track record. Bush to unveil homeowners' plan The Associated Press Updated: 4:36 a.m. CT Aug 31, 2007 WASHINGTON - Offering federal help for strapped mortgage holders, President Bush is proposing to aid hundreds of thousands of borrowers hard hit by the housing slump. The president on Friday was to talk about several initiatives and reforms to help homeowners with risky mortgages keep their homes, a senior administration official said Thursday. Bush also was to discuss efforts to prevent these kinds of problems from arising in the future. The official said Bush will direct Treasury Secretary Henry Paulson and Housing Secretary Alphonso Jackson to work on an initiative to help troubled mortgage holders get services and products they need to keep them from defaulting on their loans. The official spoke on condition of anonymity to discuss details of the initiatives ahead of the presidential event. Bush also planned to: —Urge Congress to pass Federal Housing Administration overhaul legislation that would give the FHA more flexibility in assisting mortgage holders with subprime mortgages. —Pledge to work with Congress to reform the tax code to help troubled borrowers rework their loans. —Call for rigorously enforcing predatory lending laws and strengthening lending practices. Expected to worsen Foreclosure and late payments have spiked, especially for so-called subprime borrowers with blemished credit histories or low incomes. Higher interest rates and weak home values have made it impossible for some to pay or to keep up with their monthly mortgage payments. Some overstretched homeowners can’t afford to refinance or even sell their home. Mortgage foreclosures and late payments are expected to worsen. Some 2 million adjustable rate mortgages are to reset to higher rates this year and next. Steep penalties for prepaying mortgages have added to some homeowners’ headaches. The economy enjoyed a strong revival in the spring although growing troubles in housing and credit markets have darkened prospects considerably since then. The Commerce Department reported on Thursday that the gross domestic product grew at an annual rate of 4 percent in the second quarter — the strongest showing in more than a year. But that growth could be the best showing for some time as the economy continues to be battered by the worst housing slump in 16 years and a widening credit crisis that has sent financial markets on a roller-coaster ride in recent weeks. URL: http://www.msnbc.msn.com/id/20524454/ __________________________ Africa, my Africa, I have never known you but my face is full of your blood. - David Diop |
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A1 |
=> AC9311
Although there was an investor-caused run-up in prices here in Arizona ... About 4-5 years ago, the large builders, themselves, took a pro-active move that in the end minimized the damage that places like Miami are facing. These builders limited investor purchases to no more than 20% of a project. Yeah, they lost a lot of money to the smaller builders who were willing to sell to anyone with a heartbeat and $50K. But now, the big builders are looking at 70% full sub-divisions; rather than, the 30% of the smaller builders who lost their shirts. I work in the field of investigating housing discrimination complaints. I can't tell you how many [white/male] investors came in screaming that their civil rights were being violated.  |
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A1 |
Kweli in what way did they feel their rights were violated? When we speak we are afraid our words will not be heard or welcomed. But when we are silent, we are still afraid. So it is better to speak Audre Lord |
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A1 |
Why, they're right to purchase, of course. The investors got upset when they were told, by way of the purchase agreement, that they had to take possession of the house, or pay a substantial penalty.
In my career, I have found that when ever white folks can't do whatever it is that they want to do, they are quick to scream DISCRIMINATION.  |
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C4 |
Kweli4Real
It's quite comical how some of them will acuse us of pulling the race card(as they call it). Did the builders that made self imposed measures to control the investor greed work with your office to develop that mentality? Because that is far from the norm. It's almost as though they actually looked at the past, and realized that alot of companies who were greedy back in the mid '80s condo/real estate boom are no longer in business. What are some of the tricks that they are using to keep minorities from moving into a neighborhood? __________________________ Africa, my Africa, I have never known you but my face is full of your blood. - David Diop |
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