Thursday, December 06, 2007

WTF - Bush Offers Token Subprime Mortgage Relief

Bush plans to announce a plan the would freeze interest rates for up to five years for a portion of the two million homeowners who bought houses in the last few years with subprime loans. The plan will allow borrowers to keep the low introductory rates and escape an increase of 30 percent or more in their monthly payments when the rates expire.

The New York Times reports the provisions of the plan:
  • The homeowner must be current on their payments.

  • The plan excludes any borrower whose introductory rate expires before January 1, 2008.

  • The plan excludes borrowers whom the mortgage companies conclude are making enough money to afford the higher monthly payments.

  • It is estimated that roughly 12 percent of all subprime borrowers will get relief with the Bush plan.

    Read the entire New York Times article here.

    plez sez: WTF?!?

    ok... we (the u.s.) have been mired in the after effects of this "mortgage price gouging" scheme for alittle over a year now, and this is the best that george "lining the pockets of his friends" bush can come up with?!? people are being put out of their homes, entire neighborhoods (mainly in minority areas where this scheme was perpetrated) are boarded up eye sores, and the economy is on the brink of a recession; and this is the best they could come up with?

    i live in an area that is predominantly Black and the surrounding neighborhoods are in trouble. especially, for homes that cost more than $300,000, it is becoming increasingly difficult to resell homes and new developments are sitting idle because of this mortgage mess. this has been going on for more than a year, but leave it to bush to provide token assistance for those homeowners who were FLEECED by the mortgage companies as they used loan shark tactics to sell their tainted products. i have former neighbors who were taken in by the bait-and-switch, start-'em-low mortgages that balloon into a behemoth payment that the borrower would never be able to afford... and the bad part is that many borrowers didn't know about the increases until the mortgage coupon appeared in their mailbox.

    if you take a look at the bush plan, you will see that we can spend BILLIONS of dollars attacking foreign countries, but will barely lift a finger to defend AMERICANS from predatory lenders:
    1. The homeowner must be current on their payments.
      this plan will only help those whose payments have not ballooned, the New York Times states: "it is estimated that 22 percent of all subprime borrowers are behind in their payments." this plan is not going to help over a fifth of all of the people who have these mortgages AND it does not even touch the ones whose homes are already in foreclosure or have been sold on the courthouse steps. why not freeze ALL subprime loans or provide a mechanism to pull their rates in line with a traditional mortgage (around 6 percent)?

    2. The plan excludes any borrower whose introductory rate expires before January 1, 2008.
      correct me if i'm wrong, but hasn't this "problem" been around for over a year (by some estimates, it has been over two years)? it is estimated that $57 billion in subprime loans are scheduled to be reset at higher rates before the end of 2007. this provision of the plan just goes to exclude more homeowners and does nothing for those who are on the brink of foreclosure. since the mortgage companies are dealing with federally insured funds, why not require that the mortgage companies refinance all subprime loans to traditional loans, as a punishment for this predatory practice?

    3. The plan excludes borrowers whom the mortgage companies conclude are making enough money to afford the higher monthly payments.
      this mortgage mess has depressed home values all over the country, thus stripping away the investment value of home ownership... ALL subprime loans should be refinanced to a traditional loan.

    in typical bush fashion, he rides in on his white horse to save the damsel in distress: unfortunately he shows up late and goes to the wrong address!

    bush's plan was created in concert with the mortgage lenders and wall street firms in an effort to minimize the affect on their business, but does little to help the people who are struggling under the burden of the mortgage companies' predatory lending habits of the past 3 years.

    WTF were they thinking?!?


    Fergie said...

    I am so sick of Bush...this is total CRAP!!!

    You said it best,
    "In typical bush fashion, he rides in on his white horse to save the damsel in distress: unfortunately he shows up late and goes to the wrong address!"

    Christopher Chambers said...

    Trouble is, too many crackers and other fools just blindly accept it, the way we black folks blindly accept what many of our politicos and pastors say.

    Amazing how the greedy mortgage lenders and Greenspan have not been properly smacked for causing this mess, and other financial and investment giants for making it worse!

    I just blogged on the BCS-college football nonsense and is starting to look analogous...

    All-Mi-T [Thought Crime] Rawdawgbuffalo said...

    2 bqad the plan is still lacking, i was gone give him props until i found only 1 out of 9 will qualify for the program

    David Sullivan said...

    I have mixed feelings on the subject. Predatory lending and credit card practices are enslaving lots of stupid people. It is impossible for them to get out of debt with the extrodinary interest and these practices need to be stopped immediately.

    But I am pissed at the fools that would sign up for these things in the first place. Were they thinking that they would suddenly be able to afford a $2000 a month mortgage after being barely able to pay their $800 mortgage for the first five years.

    Everyone wants to live beyond their means and for what? To be like their tabloid heroes like Brittany, Brad and the like. They knew that when they signed up for these ridiculous mortgages that the other shoe would eventually drop. Now they better go find one of those shoes and live in it like "Old Mother Hubbard".

    Priorities are so screwed up in this country.

    The "sheep" keep following the other "sheep". (probably the same dynamic that keeps Bush in power)

    Money can't buy you love.

    plez... said...

    too bad no one asked us what we thought! *smile*

    make no mistake, this bail-out is for the mortgage companies to save them from having so much worthless paper on the books and being a cause for plunging our economy into a recession.

    i don't like the way so many people jumped at these loans in the first place - i remember being offered that option when we bought our house, my wife and i flatly rejected it... it just doesn't make sound fiscal sense!

    but it also appears that many borrowers did not know that they were written these types of loans (and yeah, i know, ignorannce isn't a good excuse), BUT i feel that deceptive business practices by the lenders who knew that they would either reap LARGE payoffs for the loans OR would be getting property that they could easily re-sell. they did not expect the downturn in the housing market, which makes many of these homes worth less than the sale price!

    bush's plan does little for the poor homeowners who are STUCK with these ARMs... and continues to be a boom for the mortgage lenders. he is so freakin' sleazy!

    Chard said...

    David Sullivan ib right. The people in trouble did not do thier homework. Now we want the government to fix it. So, lets fix the interest rate at a below market rate for the select few who bought a house they couldnt afford.

    For those of you who bought less house than you wanted but within your means and at a fixed rate, good for you but tough shit. There will be no help for you. So tighten your belt, forgo the more expensive vacation, take it easy on groceries while your nieghbor 's mortgage is 2 pts or more below yours courtesy of george bush. And dont count on rates going down (so you can refinance) as they would in a free market when the market turns down. Nope the fix will keep market rates higher than normally would be the case and the government fix rate artificcially low. But the prudent borrower gets the short end of the stick and no help at all. And dont forget that times are tight for this average person as well.

    Lets see, I think I will refinance with an 1 year arm tommorrow, at a low teaser rate, cry the blues and get it fixed at that rate for five years- yeah vote hillary 2008