It’s not working. The Bush-Obama strategy of throwing trillions at the banks to solve the mortgage crisis is a huge bust. The financial moguls, while tickled pink to have $1.25 trillion in toxic assets covered by the feds, along with hundreds of billions in direct handouts, are not using that money to turn around the free fall in housing foreclosures.
As The Wall Street Journal reported Tuesday, “The Mortgage Bankers Association cut its forecast of home-mortgage lending this year by 27% amid deflating hopes for a boom in refinancing.” The same association said that the total refinancing under the administration’s much ballyhooed Home Affordable Refinance Program is “very low.”
Aside from a tight mortgage market, the problem in preventing foreclosures has to do with homeowners losing their jobs. Here again the administration, continuing the Bush strategy, is working the wrong end of the problem. Although President Obama was wise enough to at least launch a job stimulus program, a far greater amount of federal funding benefits Wall Street as opposed to Main Street. Continue reading →
Payday loan offices have been sprouting up across the country for decades. In these hard times, more people than ever are using payday loans to keep bill collectors at bay. Quick money, at interest rates of around 500% or more, for people with bad credit has been praised by some as a lifeline for the poor, but condemned by others as a trap to keep families in debt. Recently some states have passed laws limiting interest rates, but there is one marketplace that knows no borders — the Internet.
ANP visited a conference where online payday-lending lobbyists urged congress to reject reform, and then traveled to a small town near the Virginia-North Carolina border to learn about the experiences of a man who googled “bad credit loans” and found himself in more trouble than he bargained for.
If you think Bank of America is curbing their predatory practicies now that they’ve ousted Ken Lewis as chairman, think again. Check out this ad I came across:
SHORT SALE!
Have You Had Difficulty Negotiating A Short Sale With Your Lender?
To approve a Short sale of your primary home, did the Lender make you sign a note or letter stating you must repay the difference between your loan and the sale amount, even if you never refinanced your home?
Did the Lender force you into Foreclosure and Bankruptcy?
We are a group of individuals (not attorneys) concerned with the way certain Banks have treated troubled borrowers and are investigating their practices, especially in light of the billions of dollars banks have received in TARP Monies. Some of these ill-advised business practices may even be illegal under California law, and costing taxpayers millions of dollars.
This is not a solicitation of business. We want to hear from you. Confidentiality assured.
Please call 1-866-981-8781 and leave a confidential message. Thank you.
What prompted this ad is that Bank of America has apparently been screwing over troubled mortgage borrowers who are attempting to negotiate short sales on their homes. Borrowers who can’t afford to keep their homes have to work out a deal with their bank, selling short on their home at whatever the market value is currently in order to avoid foreclosure altogether. Bank of America, however, is forcing these troubled borrowers to sign deficiency letters, meaning the borrower has to repay the difference between the sale price and the remainder of the existing loan on the property, which could easily force borrowers into bankruptcy.
What’s odd is that banks get far less in foreclosure than in short sales, so it would be in their best interest to work something out. What’s more, Bank of America recently announced it was easing its policy on short sales, requiring 5 percent of short sale proceeds instead of 10 percent. But this ad makes it sound like Bank of America is still having it both ways with troubled borrowers.
In California, Bank of America’s predatory behavior might be violating the law, since they are refusing to bless a short sale if the borrower does not sign a deficiency letter, even when the borrower’s home has not been refinanced. If you know anyone, particularly in California, who has had difficulty negotiating a short sale, urge them to call 1-866-981-8781 and leave a confidential message. Bank of America has already taken tens of billions in our taxpayer money through the bailout; we can’t allow them to continue screwing homeowners at every turn.
You would think this year’s Mortgage Bankers Association annual meeting would be a rather solemn affair — given the criticism the industry has endured in recent months. But our ANP reporter attending the meeting found the bankers in a celebratory mood. The reason? A massive lobbying campaign against bankruptcy reform legislation known as “cram-down” appeared to be working.
Economists, politicians, and pundits refer to “toxic assets” as if they are some unspeakable stew bubbling in a barrel behind an old warehouse. But “toxic assets” are actually mortgages and, by extension, houses and the people who live in them. Sandra Berrios is one of millions facing the prospect of ballooning loan payments forcing her and her family from their home. The bank that lent her the money is getting hundreds of millions in TARP money, but the federal dollars flowing to the bank show no sign of trickling down to Sandra’s level.
Without resolving the chicken-egg question of which came first, the housing crisis or the banking crisis, we can say that the pace of foreclosures is accelerating with the downward economic slide. Every thirteen seconds, an American loses his/her home. In 2008, more than 2.3 million families faced foreclosure. If the government doesn’t intervene in a muscular way, an estimated 6 million owners will lose their homes in the next three years. President Obama has proposed to attack the crisis with a $75 billion initiative, the Homeowner Affordability and Stability Plan. A commendable effort to directly address the problems faced by homeowners, the bill nevertheless has inherent limitations on who can benefit from it.
As a kind of home remedy, so to speak, The Nation and the Association of Community Organizations for Reform Now (ACORN) have issued a useful list of ten ways to prevent or fight foreclosure.
The House just voted to pass H.R. 1106, the Helping Families Save Their Homes Act of 2009. Over the past four days, the Fighting For Our Homes Campaign produced almost 17,500 petition signatures and countless phone calls urging members to support this legislation.
As we now take the fight to the Senate, we are unveiling this new video and sending it to Senate staff to remind them why the playing field must be leveled for homeowners. Dan’s story is one of greedy lenders abusing the trust of people who play by the rules and try to live the American Dream. Dan lost his house and he is the face of what we are trying to avoid. The Senate must quickly take up bankruptcy reform legislation and pass it.
At the insistence of the “centrist” democrats under the leadership of Ellen Tauscher, and with the cooperation of Blue Dogs, the Bankruptcy Cramdown has been made more favorable to the banks that started the entire thing, and the investors who trusted them.
The original bill made it easy for the homeowner to file Chapter 13 and write the mortgage down to its current market value. In doing so, it gave the homeowner a strong bargaining position. The amendments bog down the process in a thicket of bureaucratic nonsense, and water down that bargaining position to next to nothing. Jane described the changes here, so I won’t repeat them.
One group of amendments practically requires the homeowner to try to participate in the non-bankruptcy work-out plan of President Obama. This site contains information about this program. This plan thrills the financial industry because the Treasury bears part of the loss, and pays servicers to make the modification. It also contains a provision that conceivably might encourage investors in Residential Mortgage Backed Securities to allow the modifications.
So, lesson learned: do not cancel on The Daily Show. Or at least do not do whatever CNBC and/or Rick Santelli did, in the way they canceled on The Daily Show, because last night, Jon Stewart basically said, “I’ll see your canceling on me and RAISE you a thorough evisceration of the faux-populist bilge you’ve been pumping and a complete blasting of your network’s credibility.”
Stewart aped Santelli’s newsgrabbing shouty-faced blubber from the Chicago Mercantile Exchange, coyly admitting, “I have to say, I find cheap populism very arousing.” And then, for eight minutes, Stewart at his arch best (with the help of the crackerjack Daily Show research team) went on an absolute tear and burned CNBC right down to the doorframes. “If only I’d followed CNBC’s advice, I’d have a million dollars, provided I’d started with a hundred million dollars.” Brutal, but utterly hilarious.
House Democrats reached a compromise yesterday on the cramdown provision of John Conyers’ Helping Families Save Their Homes Act, and for a change, it was a decent compromise. Proponents of this legislation pretty much managed to keep the cramdown provision intact, meaning that bankruptcy judges will be able to modify mortgages for homeowners facing foreclosure on primary residences. Plus, there were negotiations with Senate Dems and not just New Democrats, who have been acting on behalf of their corporate interests and have made passing cramdown legislation ridiculously and unnecessarily difficult.
If you want to see what I mean, read Dday’s excellent post, “Ellen Tauscher’s Insatiable Appetite for More Homeless People,” which lambastes Rep. Tauscher, head of the New Democrat Coalition and former Wall Street investor, for delaying this much needed legislation and then bragging about it. Then, read the hilarious message Tauscher’s office sent to Chris Bowers, which took a defensive tone over the criticism Tauscher has received. Tough shit Tauscher! She’s the one who put the interests of banks before her constituents. Not to mention the fact that she has a former bank industry lobbyist working in her office, and is STILL working to restrict the power of bankruptcy judges.
Chances are Conyers’ compromised legislation will pass the House tomorrow. And while, as Bowers noted, it was a good sign to see Senate staffers participating in yesterday’s negotiations, odds are HR1106’s counterpart in the Senate will still face a tough battle. That’s why it’s key to keep Brave New Foundation’s petition going that over 17,000 people have signed in the last four days! We have to keep the pressure up on Congress and get these judicial modifications passed.
