Final Housing Bill Passes House, Bush to Sign into Law

[Moe Bedard]

I wrote about this on my blog and I'll cut and paste some highlights here. The facts are that this will not do any good for 95% of the people who are struggling with their exploding mortgages because in order to get relief, lenders and servicers will have to comply and participate in making this work for you all.

It is 100% voluntary for the lenders and servicers to do this. Meaning to participate and help.

Many of you know that many of these same lenders and servicers are far from cooperative and NOT willing to help. So, what makes me think they will now? I don't think they will do more than they have been doing now.

This bill is nothing more than a tax payer supported bail out of Fannie Mae and Freddie Mac with a little sprinkling of good for a very few select group of people who this bill will help.

[Moe Bedard]

The House Approves Massive Housing Bill - But Will it Help You? | Loan Modification & Home Loan News
By Moe Bedard

The House approved a massive plan Wednesday to try and put the brakes on the foreclosure crisis that is sweeping the nation and causing the worst housing decline since the Great Depression. The goal of this new bill is to provide aid to homeowners facing foreclosure and also a “bail out” of government backed mammoths Fannie Mae and Freddie Mac.

The question of the day that the people should ask is, “Does this new bill “really” help us on Main Street or is this just another cleverly packaged tax payer bailout of their mortgage buddies Fannie Mae and Freddie Mac and also an artificial pump to blow hot air on Wall Street for a just little bit longer?

Let’s take a look underneath the hood of this new bill and see if we, the people, can decipher the truth.

• $300 billion to provide more affordable mortgages to troubled homeowners
• Nearly $4 billion in grants to help communities fix up foreclosed properties
• $7,500 tax credit for first-time homebuyers

Now, what are the qualifications to get help? Come one ladies and gentleman, help from our government does not come with some strings and a few chains, you know that!

• The tax break only applies for homeowners who purchase between April 9, 2008 and July 1, 2009. The full amount of the credit also is only available for individuals with incomes under $75,000 or couples earning less than $150,000. Moreover, it will have to be paid back, interest-free, over 15 years
• Qualified borrowers must live in their homes and have loans that were issued between January 2005 and June 2007. Additionally, they must be spending at least 40% of their gross monthly income on all household debt to be eligible for the program.
• Homeowners, who are spending more than 31 percent of their income on their house payment, may qualify for a new, more-affordable loan backed by the Federal Housing Administration under the bill. Lenders, however, would have to agree to take a loss on the existing loans, and would walk away with at least some payoff and avoid the costly foreclosure process. Lender participation is also voluntary.
• Qualified borrowers must live in their homes and have loans that were issued between January 2005 and June 2007. Additionally, they must be spending at least 40% of their gross monthly income on all household debt to be eligible for the program.
• Homebuyers who purchase a property with an FHA loan will no longer be able to receive financial assistance from the sellers. The bill closes a loophole that let sellers channel money to buyers through charities.
• The bill allows the government to buy stock in them and extends a line of credit to the companies

This bill clarifies that lender and servicer participation is ”voluntary” and that if they decide not to help you, then that is their choice.

If anyone who knows anything about what these creeps are “really” doing on the street, the people on the front lines will testify that this is the BIGGEST problem we face fighting for people’s homes. You cannot have cooperation form uncooperative people who lie, cheat and steal homes from the American people!

Here lies the “major problem” with our Senate.

They are asking these very uncooperative lenders and servicers to help when in fact they are doing the exact opposite and they have been doing this the whole time. The lip service continues as thousands of people in your states are losing their homes, when in fact, many could be saved.

How long is it going to take for our ”representatives”, yes, the people who represent the people, to understand that these companies are exploiting the great people of their state and asking them to cooperate, will NEVER get us anywhere?

Excuse me, but shouldn’t lenders and servicers be “MADE” to clean up the mess they created?

Shouldn’t we demand that they do more to help the homeowners who need help, but are not getting it because they simply do not have enough man power to help you? Shouldn’t we demand that they open additional foreclosure prevention centers and hire thousands of people to assist struggling homeowners?

YES WE SHOULD!

But, it looks like to me, that we have another cleverly packaged bill disguised to provide help and hope for the millions of American losing their homes. When in reality, it is just another bail out backed by tax payer blood.

Business as usual in Washington.

[angel83]

Moe,

I was reading that this will give the lender incentive to foreclose as opposed to working with the homeowners?

[Moe Bedard]

I have not heard about this happening, but I will definitely look into that.

The problem is that you have so many players and big wigs that cant agree on just fixing these loans for those that deserve their loans fixed. Plus you have the evil servicers who make money off of late fees and garbage fees because a person is in default.

As long as their (servicers) allowed to operate like the wild wild west, then we will continue the circus and hamster wheel routine.

There needs to be at least 100,000 people to be hired by these servicers to "properly" help homeowners and this is a low number. Until I hear this (mass hirings and more offices) is being done, it is all just BS lip service and the we, the American people need to demand that more be done and make sure that congress knows what is REALLY happening on main street.

[ccsint]

Hi Moe,

I read somewhere that part of the bill exempts servicers from being sued by investors because of a modification. If this is true, wouldn't this potentially lead to increased modifications or principal reductions? I'll find a link if needed.

Also, on the participation front, I read this internal Bank of America document a while back - http://www2.nationalreview.com/dest/2008/06/20/bofa.pdf.

It essentially is very supportive of the bill. It seems like they are in favor of the bill, but if nobody participates then I think the next bill that goes through congress won't be so "voluntary".

Thanks again,

ccsint

[angel83]

Originally Posted by Moe

I have not heard about this happening, but I will definitely look into that.

The problem is that you have so many players and big wigs that cant agree on just fixing these loans for those that deserve their loans fixed. Plus you have the evil servicers who make money off of late fees and garbage fees because a person is in default.

As long as their (servicers) allowed to operate like the wild wild west, then we will continue the circus and hamster wheel routine.

There needs to be at least 100,000 people to be hired by these servicers to "properly" help homeowners and this is a low number. Until I hear this (mass hirings and more offices) is being done, it is all just BS lip service and the we, the American people need to demand that more be done and make sure that congress knows what is REALLY happening on main street.

Thanks Moe,

What do you suggest for those of us who don't fall into the Jan 2005 - Dec 2007 timeframe - we are actually Oct 2004 - since we don't qualify under the new housing bill? Do you think that lenders will at some point seriously consider loan principal reduction? We are in San Diego where our area has been hit pretty hard.

[Dette]

Originally Posted by colahhh08

covina (charter oak). where you?

Wow, I am also in Covina Charter Oaks area.

[925girl]

Moe,

What can we do? For the first time in months I felt a glimmer of real hope....That we could get a loan we could afford, never mind the strings attached. Would it benefit these lenders to make .50 cents on the dollars vs. expensive foreclousures or is it in their benefit to lose money so they can write off the losses? If the latter is the way the game is played then we will all lose and still have higher taxes coming out of our stretched paychecks. If I lose my house, I will never strive to be a middle class citizen again. From what I've seen happen to California the disparity between income is truly rich or poor or rich and working poor. At my bank this afternoon a teller and I talked of how we cannot understand why as American's we have not staged massive marches. It's as if we are in a stupor. I know food riots are going on in the poor countries of the world but we just take it and gripe among ourselves. I'm still wondering why the media has not bombarded our senses with the truth about the reptile Mozilla and his cronies. The fact that certain politicians got favorable loans just disapears the next day but we can't sleep at night. I think I'm living in an age where pigs do fly. I have to fight for a fair outcome. Can Loansafe prepare a letter stating our objectives and do a massive email? Can we donate some money into a trust account to be used to further our message of help needed now?! Could you administer such a thing without losing your license? If all of us who faithfully study this web site donated $20 could we take out full page ads in the areas hardest hit to get people to come and get mobilized? I sound like a revolutionary but other groups get their msg. out loud and clear and we sit and worry and wait. It's time to get on the bus people. What do you think???

Cristina

[cwb124]

I am also very concerned with the "voluntary" part of this bill. If you think you've been having trouble trying to get your servicer to simply modify the loan, good luck trying to convince them to write down 20% to 30% of it.

My questions is if anyone benefits, who will it be? Mortgages under $200k or the big ones over $400k+?

[Moe Bedard]

I read somewhere that part of the bill exempts servicers from being sued by investors because of a modification. If this is true, wouldn't this potentially lead to increased modifications or principal reductions? I'll find a link if needed.

This is something I didn't read in it. BUT , will read it again for this clause. This would be HUGE for us all, but we still may have hesitation form servicers based on the simple fact that they make money when someone is in foreclosure and default and it costs money to do a loan modification or big money in principle write downs etc.

Also, on the participation front, I read this internal Bank of America document a while back - http://www2.nationalreview.com/dest/2008/06/20/bofa.pdf.

What these banks and servicers claim and what they are doing have been common knowledge among st consumer advocates and homeowners who see the BS everyday. Most of it is lies, cover ups and lip service.

It essentially is very supportive of the bill. It seems like they are in favor of the bill, but if nobody participates then I think the next bill that goes through congress won't be so "voluntary".

Yes, Barney Frank KNOWS this is a very serious issue and he made this comment the other day.

Barney Frank Calls for Foreclosure Freeze

By Moe Bedard on July 25th, 2008
The chairman of the House Financial Services Committee called on lenders to stop filing foreclosures until a new foreclosure-prevention program takes effect.
On Wednesday, Rep. Barney Frank (D-Mass.) had called on lenders to make immediate use of the program, which is included in a massive housing package that passed the House this week and is expected to be put to a vote in the Senate this weekend. President Bush has said he will sign the measure. Frank yesterday corrected those remarks, noting that the program would not take effect until Oct. 1.

The program seeks to move as many as 400,000 distressed borrowers into more affordable loans backed by the federal government. Erick Gustafson, a lobbyist for the Mortgage Bankers Association, said loan servicers would consider Frank’s request.

Comment from Moe: Barney, don’t ask, MAKE THEM!

Washington Post



Thanks again,

ccsint[/quote]

[Moe Bedard]

Thanks Moe,

My pleasure!

What do you suggest for those of us who don't fall into the Jan 2005 - Dec 2007 timeframe - we are actually Oct 2004 - since we don't qualify under the new housing bill? Do you think that lenders will at some point seriously consider loan principal reduction? We are in San Diego where our area has been hit pretty hard.

[/QUOTE]

This is something that will be like pulling teeth to get and if it does happen. It will be a case by case basis. Plus it is voluntary and that means they will do what they want, when they want.

Think about this, if they announced that they were doing write downs, then everyone, I mean everyone would be demanding their mortgage written down and if they don't get what Joe Neighbor got, then they will walk.

A MASS EXODUS WOULD OCCUR.

There ARE millions of loans to be written down and that will take LOTS of time and LOTS of loan workouts done on a case by case basis. AND until these servicers hire the proper amount of people needed just to handle the people that need help now, then this is all just propaganda and it is doing what propaganda is intended for, to fool and confuse the people.

Just like we are having here.

[Moe Bedard]

Christina, you are a woman cut from the same cloth as me. One who questions what we hear and one that wants to do more to fight against the system that has let us all down and one that continues ridiculously into oblivion.

What can we do?

Help me expose the truth, just like you are doing here.

Would it benefit these lenders to make .50 cents on the dollars vs. expensive foreclosures or is it in their benefit to lose money so they can write off the losses?

Yes it would. BUT they are using clever accounting tricks that involve letting many homes go to foreclosure so they can pump up their books for one more earnings report quarter. (there is much more involved in this then saving homes and money. these banks are letting people go to foreclosure death as casualties of war, so they can keep their heads above water for one more 1/4)

At my bank this afternoon a teller and I talked of how we cannot understand why as American's we have not staged massive marches. It's as if we are in a stupor.

EXACCCCCCCCCCCCCTTTTTTTTTTTLY Cristina!!!!!!!!

We the people, need to WAKE UP, and FIGHT BACK. I stood where Martin Luther King Jr. did 40 years ago last week, and his legend and the aura I felt gave me that vision. We can stage a march like his (100,000 plus and demand that these issuing power of money by the banks and federal reserve is given back to the people).

Until this happens, the banks and the Federal Reserve will control how (us) this pans out for us all.

I think a homeowner strike should be what we do or a credit strike. Stop paying the debt slave masters. The Banks and stay in our homes. WHAT? are they going to kick 10 million ppl out over night????

Can Loansafe prepare a letter stating our objectives and do a massive email? Can we donate some money into a trust account to be used to further our message of help needed now?! Could you administer such a thing without losing your license? If all of us who faithfully study this web site donated $20 could we take out full page ads in the areas hardest hit to get people to come and get mobilized? I sound like a revolutionary but other groups get their msg. out loud and clear and we sit and worry and wait. It's time to get on the bus people. What do you think???

I think this is an awesome idea and one I am working on as I write this. Loan Safe is going to get busy and active BIG TIME and I would love to have you all involved.

Keep fighting Cristina. Hope is in the heart, not in a bill or false promise. Never lose that PLEASE!!!!!

[Moe Bedard]

My questions is if anyone benefits, who will it be? Mortgages under $200k or the big ones over $400k+?

I would bet that it will help more of the $200k borrowers because the $400k plus is in places like Cali and Florida where they experienced 100% appreciation in a few years. The 200k will be less risky for them to do this with and cost them less.

Everyone needs to realize that the banks are using you all as poker chips on their books and for accounting purposes and if you are not in their hand, then they plan to throw you under the poker bus. Sooner, rather than later.

They are not our friends and the will NEVER be. We are pawns in their game.

My question to all is, "How long are you going to let these banks control the people of this country?"

[loanmodwannabe]

Moe,
I think your message is a call to financial "arms" - we must do something! We are all in the same boat, and by seeing your increased page views on this site, this movement is swelling. We must get the word out and spread your message - we must MAKE the banks help us, not politely ask them to voluntarily cooperate. I think this bill is a huge propaganda machine as well intended solely to bail out Fannie and Freddie. The fact that "total debt cannot exceed 95% of the home's appraised value at the time" in order to be considered for this program pretty much discounts the majority of us in this forum since many of us owe much more than our homes are worth. This bill is filled with too many hoops to jump through, it's all lip service to make our elected officials look good. Keep up the fight, Moe!!!!

[elpjohnson]

I completely agree with Christina......WE ALL NEED TO GET ON THE BUS and start fighting for our homes.....OUR American dream. Moe, I would be willing to donate a minimum of $20 to get OUR message out. Maybe you should have a small membership fee for forum members so that we can fight foreclosures and take out full page ads to get people involved in the fight. Or maybe you can have a trust account set up for voluntary donations from members so we can get this going.....I know that a lot of members here can't afford much but a small donation, anything would help.......

Just my .02 cents.....

[elpjohnson]

loanmodwannabe.....

You are absolutely right! We do need to find a way to make these lenders and investors give us mods to stay in our homes.

And yes, the housing bill is a bunch of propaganda dressed up to look like the government is helping struggling homeowners but it's only helping Fannie and Freddie.....

[RudyJay]

That said.. I agree with you totally... It is meant to help the "Big" lenders... I would never have qualified before or now for FHA or Fannie and Freddie... It will be interesting to see who will qualify with the economy the way it is...rj

[PDressage]

What about people who have bad credit and are unable to refinance?

[angel83]

Originally Posted by RudyJay

That said.. I agree with you totally... It is meant to help the "Big" lenders... I would never have qualified before or now for FHA or Fannie and Freddie... It will be interesting to see who will qualify with the economy the way it is...rj

I am with all of you here on this! Sign me up! I am like many others here and in our country. Between a rock and a hard place and quite honestly, I'm sick and tired of being pushed around. I want to stay in my home, but because of things beyond my control, much lower equity, a whole lot of nonsense and mistruths when I set up my loan and the fact that I am one of the "outsiders" as I don't qualify for any of the assistance. I work hard and try to pay my bills too. Let me know how I can help, I too am definitely on board.

Moe, your comment about the servicers make money on the foreclosures and lose on the loan mods. Really? that makes me sick and further's my suspicion that they will feel the incentive to foreclose. Did I understand you right?

[925girl]

Moe,

I was thinking about the idea of organizing a march, to show real people, thousands but I also thought about how difficult it could be for people to afford plane tickets in these dark times. Also, maybe the apathy that we are witnessing is because people are so streched between working, driving etc.
So maybe we could really start with emailing officials. The other thing is advertising on local cable channels. I have no idea of the type of cost but I also hear newspapers are now considered old. Your youtube presentation was good and maybe we should start making our own "infomercials" for like 3 min. I have no idea how to post a video but I don't think people are aware of the type of blatant predatory loans some folks ended up with either! Maybe we can start a reality show "I'm Losing My House". How about an HBO documentary? Anyone have any connections in the industry? How hard would it be to get a camera and start taping? Maybe I'm just getting too far out here but I thought I would put it out there...You know now that I think about it how come no one has done that yet? Is the banking lobby so strong they could squash those stories? You know I have talked to people who don't know who Mozilla is! It's shocking really.

[imadreamer]

i will wager a bet here - i bet that the servicers will "write down" fees plus delinquency and that's it - and leave all other terms of the loans as is. on paper it will look like a "principle reduction" but in reality i will bet you a box of donuts that the write downs, if any, will simply amount to this. it will look like they are "cooperating". we'll probably end up getting a 1099 for the "write down".

i try to put myself in the shoes of a servicer - i heard they get 1% off of every loan. there aren't many new loans being taken out today (especially subprime), so one would THINK that they would do everything they could to hold on to the income stream. just my thoughts.

another thought i've had for quite a while - what if every homeowner stopped making their mortgage payments, say, for two months? i say bring 'em to their knees.

[mustangpg]

Doesn't it read that after 5 years if you sell or refinance you have to pay back 50% of the profit?

[Irish Gal]

I say we call Michael Moore (American filmmaker/documentarian) who is a master at filming/documenting American classism, corp greed/white collar crime and phoney politicians like no other American filmmaker has done or is willing to do (and w/ good, ole fashioned Irish wit!). Folks either love him or loathe him. I happen to love him. He has been successfully exposing (for years by masterfully filming/documenting) American corp predators/thieves (various industries) and all the phoney legislators/politicians (both sides) who shake hands with them over and over and over again. He has several movies. Check them out. I would LOVE to see him (or someone like him) follow the various predator clowns and the various congressional clowns around who are directly responsible for this housing mess and watch them all squirm when he holds them aaaaalllllll accountable (on camera) for all of America to see their financial wars and absolute take down of Americans re their housing/lending/servicing crimes. This sad American story needs to be told by someone like Michael Moore and put up there on the screen for all to see. What is unusual about this particular corp raid on America is that it has hit middle America hard also and STILL nothing has been done to stop and/or hold the usual corp felons accountable. Usually when American ills (i.e. classism) trickle "up" to hit the middle-class things begin to change (for the better). So, this shows just how much our politicians have really thrown middle America under the bus. I agree with a mass mortgage strike. No real (and quick) results for suffering homeowners? No mortgage payments until REAL help is provided ! Bypass all the phoney programs, fake Page Ranking stunts, and grandstanding by politicians in an election year. It is clear now that no one is going to truly act in the best interests of the homeowner.

Just my .2 cents worth. I say, go Michael Moore !

Irish Gal

[Irish Gal]

Re my last post: my abreviated "PR" meant "publicity" stunt. The site incorrectly placed the words "page ranking." It said to contact "administrator" to have changed which I have no idea how to do.

IG

[Moe Bedard]

Loanmodwannabe - Thank you and yes, we must stop asking nicely and start fighting against this BS and propaganda. This thread is a start. We just need to figure a way to organize this and I think I have a great idea.

Erika - You're on the right track. We need to figure a way to make this site more of an activist site also. Meaning, more calls to action and to make it easy for the members and people to have their voice heard. Lets keep brain storming nd I need to call you today anyway.

Rudjay - Just like the FHA Secure that has helped maybe 300 people. It was supposed to help hundreds of thousands. Remember this bill was approved just days after it was announced that Freddie and Fannie are in BIG trouble.

PDressage - That is 95% of borrowers right now. So, as always, my advice is fight for a loan modification.

angel83 - Servicers make more money by keeping someone in foreclosure so they can rack up late fees and penalties. It costs them nothing to do that and it makes them money (the longer they can keep you there). When they do a loan modification it costs them hundreds of dollars in man hours etc. to complete one. So, there is little incentive for them to help when there is more incentive not to help.

925girl - Now you're talking. That is sort of my idea with the new video I did the other day as you mentioned. I actually registered the domain SavingtheDream.TV and wanted to start a video series on there as a grass roots media channel for all of us to post our video stories (horror stories). The banks cant squash us on the internet our out spend a grass roots consumer advocate machine like Loan Safe.

Imadreamer -Lets start a homeowner strike today! I have been saying that for months and agree with you 100%!

Irish Gal - Great idea on Michael Moore and I agree that he is an awesome story teller and purveyor of the truth. A mortgage strike may be the way to start this. Lets keep brain storming guys and gals. mmmmmmmm.......