Bush will announce later today a plan for helping low-income homeowners curtail foreclosure. [NYT]

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  1. ArtDonovansDrunkenLovechild says:

    He is going to completely undermine FHA. How do you expand criteria? Im ok with larger loan limits, but if you create a “subprime” FHA you will undermine the whole system. There is a company that does that in Maryland, and they have filed for BK twice already.

    The whole point of DTI caps on FHA was to minimize foreclosures, and put people into houses they can afford.

  2. Eric says:

    ATTACK IRAN!!!

    Oh wait, that is scheduled for later this year.

    Anyone want to bet that his plan consists of tax cuts for people about to face foreclosure? I will give you good odds.

    Of course, the fact that low income people pay very little, if any, federal tax will not be part of the speech.

  3. QuantumRiff says:

    Maybe the government could let them delay paying federal taxes this year until next year. This extra money could be used to make the increased mortgage payments. However; next year you would have to pay both years taxes, plus you would get charged 1.5% a month on the taxes owed. Cmon you people that don’t understand mortgages and interest, its only 1.5% a month!

  4. kewl132 says:

    Yeah but remember if the President does this it’s not a bailout. Thats only if a Democrat did this.

  5. Eric says:

    Figure out a way to get people out of their mortgages without destroying their credit. Don’t give them a handout to subsidize a house that they can’t afford and should not own.

    Why should they have a nicer house than me when I can actually afford to pay for mine?

  6. kellyhelene says:

    The Buffalo housing court has a novel solution.

    Any bank with current judgements against it cannot foreclose on more properties until all fines are paid and all properties are brought up to code.

    Granted, this only works in a place like Buffalo, where the housing exceeds demand.

  7. Trai_Dep says:

    And, it’s an indirect subsidy to the irresponsible lenders, merely laundered thru the borrowers. Darwin rules.

  8. GearheadGeek says:

    @trai_dep: Darwin rules? Is this some new Darwinist theory, “Survival of the Crookedest?” If Darwin were to rule, the people who couldn’t figure their own budgets and pay their mortgages would go broke, and shady mortgage companies carrying lots of high-risk mortgage would go out of business, and the scummiest of all, the mortgage brokers who SOLD the risky loans to buyers and had them underwritten to stupid lenders would get off scot free. Oh, wait… isn’t that what’s happening?

    These various buyout and assistance plans are anti-Darwinist. If I were emperor I’d force the brokers, mortgage holders and homeowners to all share in the financial pain. Mortgage holders would be forced to renegotiate to more equitable terms, homeowners would be forced to pony up as much of what they owe as they can possibly afford, and mortgage brokers would have to return some of their profits where it can be shown that they acted to get loans underwritten that shouldn’t have gone through. Everyone loses, but just a little, fewer houses are foreclosed, the economy takes less of a hit, and the news outlets would be able to scream about me being a socialist emperor instead of about the mortgage companies bringing about the end of the world.

  9. Nately says:

    @Eric: Don’t be silly. The tax cuts are for bankers and CEOs who will magically funnel the money to the poors through the stock market. Don’t you know how economics works?!

  10. othereric says:

    @Eric: “Anyone want to bet that his plan consists of tax cuts for people about to face foreclosure? I will give you good odds.”

    You are not cynical enough. Those about to face foreclosure are not rich enough to deserve a tax cut.

    Instead, Bush will suggest tax cuts for the rich in the theory that the rich will then have more money left over to lend to poor homeowners.

  11. Canadian Impostor says:

    Just leave it alone. The market is correcting itself, it doesn’t need any intervention.

    Aaaargh.

  12. KernelPanic says:

    Is there anything more Bush could do to ruin the economy? Lots, I’m sure.

    kp

  13. Norm_NAv says:

    We as a society have passed the last exit to Sanity several miles ago, yet we are headlong into solving the next of our ills.
    13% of the Mortgage market is subprime. of those 14% are in default, so it the whole mortgate pie is 100, the ammount of impact on the whole of subprime default is 1.8% which is about equal to last years cost of living allowance. Wholes lots ado about nuthin’.

  14. Trai_Dep says:

    Good point about Bush’s change forcing FHA to accept subprime loans, if that’s accurate. That’s his M.O. Attempt to destroy a functioning, useful, popular gov’t program via trojan horse policies. All to further GOP’s failed ideology.

    Tens of millions of Americans ruined in the process? Hey, omlettes, eggs, people!

  15. Jesse in Japan says:

    Bush will probably just say that people who got subprime mortgages but can’t keep up with the payments should sell their children into indentured servitude.

  16. BenMitchell says:

    @KernelPanic: For the love of GOD do not ask that question! Never invoke the name of that devil for you might draw attention to yourself and your family :)

    But anyway – the system is correcting itself right now. I just hope that when the bubble is fully burst that the housing prices that have been artificially raised through the roof will come back down to something close to normal.

  17. MissCellania says:

    The most ridiculous part is trying to “fix it” so MORE low-income buyers can get in over their heads next year!

  18. Chicago7 says:

    Let’s see:
    He did really well in Iraq.
    He did really well in New Orleans.
    My guess is, we’re heading for a depression. Turn your money into gold NOW.

  19. jeffeb3 says:

    @Norm_NAv: Except that this is just the tip of the iceberg. For one thing, there are a lot of sub prime loans that will be defaulting very soon, because their payments are about to go up, and they won’t be able to refinance because everyone is afraid of sub prime mortgages right now. If the 7 million homes that are predicted to default in the next year, Then house prices will fall, meaning some people’s homes will be undervalued, and people can’t refinance, because they will be underneath their loan. That means more defaults. This is a slippery slope.

    Also, over 140 national mortgage companies have already gone bankrupt. Explain how that’s insignificant. Country Wide would have tanked if they didn’t get loans from B of A. They own 80% of the US mortgages. If they go down, expect serious repercussions.

    What really worries me though, is who is going to get rich in the repairing of this system. I don’t want some plan that involves giving really cheap money to mortgage companies so they can buy all these loans to save people, only to run away with bags full of money and power to dictate the market when things get smooth again.