N.J. senator wants to aid subprime borrowers

[Sapiens]

http://dailyrecord.com/apps/pbcs.dll...ES01/703290398

BY MARTIN Z. BRAUN
BLOOMBERG NEWS
Thursday, March 29, 2007

A New Jersey state senator wants to create a program to help homeowners refinances mortgages they can't afford, mirroring a similar plan in Ohio.

Sen. Ronald Rice, D-Newark, said Wednesday that he plans to introduce a measure that would allow the state's housing agency to borrow at least $100 million to offer 30-year fixed-rate loans to homeowners facing foreclosure.

''Many of my neighbors face real financial peril because of rising interest rates and changes to the housing market," Rice said. ''More people are making late mortgage payments, missing payments altogether and going into foreclosure."

Rice's plan comes after a move by Ohio, which had the highest foreclosure rate among the 50 U.S. states at the end of 2006, to issue $100 million in taxable municipal bonds to help homeowners refinance mortgages they can't afford.

[Sapiens]

States consider issuing bonds to aid subprime mortgage holders

http://www.ocregister.com/ocregister...le_1633023.php

WASHINGTON – A growing number of state housing agencies are developing or considering issuing bonds to assist subprime mortgage holders to refinance their obligations at fixed rates, officials at housing agencies said Tuesday.

The Ohio Housing Finance Agency intends to issue $100 million in taxable bonds on April 2 to refinance about 1,000 loans averaging $100,000 each, held by homeowners with poor credit histories, with a fixed rate of around 6.75 percent, an official with the body said.

Ohio's agency was inspired by another state body that implemented a similar refinancing package in recent months.

"Maryland has had a similar refinancing program for subprime mortgages for the last few months," said Garth Rieman, director of housing advocacy at the National Council of State Housing Agencies.

...

In recent weeks, financial markets have been shaken by increasing delinquencies among subprime mortgages offered to borrowers with damaged credit. This has triggered concerns that the fallout may spread to mainstream lenders and damage the U.S. economy.

Rhode Island, Massachusetts and Virginia are now "running or developing similar programs and are further along than other states," Rieman added.

Colorado, California, Washington and Wisconsin, meanwhile, have been inquiring about the details of such refinancing programs, Rieman said.

Indiana, meanwhile, is about to open a hotline to help homeowners facing foreclosure and is offering referrals to advisers who are able to assist with loss mitigation, while the state legislature is considering a bill that includes a public awareness campaign.

"We are not currently offering such a (refinancing) program," Indiana Housing and Community Development Authority spokeswoman Amber Seidler said.

"Tax exempt bonds are, pursuant to the IRS (U.S. Internal Revenue Service) Code, limited to being used to fund new mortgages, not refinancings," she added.

"A couple of other states have set up pilot programs utilizing taxable bonds to target subprime borrowers, but they are very new and we have not reached that stage of having a program ready to offer," Seidler said.

[Sapiens]

Congress must aid subprime victims: consumer group

http://www.abcnews.go.com/Politics/wireStory?id=2950367

Mar 14, 2007 — WASHINGTON (Reuters) - U.S. homeowners with subprime mortgages struggling under payments need federal government help to ease them through the crisis, a leading consumer advocacy group said on Wednesday.

Fresh data on increased mortgage delinquencies and the collapse of several mortgage lenders have increased attention on subprime loans offered to borrowers with damaged or sketchy credit histories.

As many as 1.5 million Americans could lose their homes as the subprime market shakes out, the National Community Reinvestment Coalition (NCRC) said, and so Congress should step in to protect those troubled homeowners.

The group, which represents hundreds of low-income housing advocates across the country, said Congress should immediately step in to aid subprime borrowers.

"As this crisis worsens, mortgage tsunamis will ravage working-class neighborhoods across this country," John Taylor, NCRC's president, said in a statement.

The group said that it would outline details of its proposal in a conference call late Thursday morning.

On Tuesday, two top Democratic lawmakers said that they were mulling legislation to tighten subprime lending rules and aid borrowers now in distress.

In the U.S. Senate, Banking Committee Chairman Christopher Dodd said he may offer a bill to protect consumers who were "victimized" by subprime mortgages they can no longer afford.

Meanwhile, the chairman of the U.S. House Financial Services Committee said he planned legislation that would restrict overly risky mortgages now that the subprime market is in turmoil.

Rep. Barney Frank, a Massachusetts Democrat, also said he did not think the subprime mortgage problems posed any broad threat to the U.S. banking system at this time.

[Sapiens]

Thousands set to lose homes to loan tricksters, sez Chuck

http://www.nydailynews.com/money/200...time_bind.html

More than 91,000 New York families could lose their homes by the end of next year because of unscrupulous mortgage lenders who offer "affordable" loans with rates that quickly balloon, according to Sen. Chuck Schumer.

"For thousands, the American dream of homeownership has turned into an un-American nightmare," said Schumer at his Manhattan offices yesterday.

A little more than half of the endangered homeowners, or 46,546, live in and around New York City, according to Schumer's figures.

"Thousands of middle-income and lower-income New Yorkers were tricked into borrowing these loans, and they are loans designed to fail," said Schumer.

Subprime lenders have come under fire for offering borrowers adjustable rate mortgages with an initial low "teaser" rate.

This rate changes after a fixed period, usually two to three years, and can even double, causing the homeowner's mortgage to balloon.

Two months ago, Frank Ruggiero refinanced the mortgage on his Queens home in hopes of saving $100 a month.

"It sounded so honest," said Ruggiero, 69, recalling how a mortgage broker sold him a deal that was supposed to cost him $1,240 a month for the mortgage on his house in Ozone Park.

A few days later, he learned he had been wrangled into accepting a subprime mortgage.

Ruggiero, who lives on the $3,540 a month he gets from a pension fund and disability payments, fears he will lose the home he's lived in for 32 years when his mortgage payments jump to $3,000 a month in three years.

"If it happened to me, it's going to happen to somebody else," he said. "It's not fair. I want something done to these people, so they can never do it again."

Schumer, who sits on the Senate's Banking, Housing and Urban Affairs Committee, unveiled plans for legislation putting an end to subprime mortgage lending.

His proposals include establishing a national regulatory system to target "rogue" mortgage lenders and brokers; eliminating "liar loans" by creating a suitability standard for borrowers; prohibiting prepayment penalties, stated-income loans and "pick a payment" gimmicks that coerce borrowers into signing higher loans than they cannot afford, and creating a state foreclosure prevention task force.

"In the last year, the problem has exploded," said Oda Friedheim, a staff attorney for the Legal Aid Society, who is representing Ruggiero. "It is big and it is growing, and people are getting way overextended."

Enough, you can see how the game is going to turn out.

[Sapiens]

Re: Thousands set to lose homes to loan tricksters, sez Chuck

http://www.prnewswire.com/cgi-bin/st...4561945&EDATE=

NAR Urges HUD to Revamp FHA Program to Help People Stay in Their Homes

In light of the many families being
affected by negative subprime mortgages, the National Association of
Realtors(R) encouraged the Department of Housing and Urban Development to
act quickly to change the FHA mortgage insurance program to enable more
homeowners and their families to keep their homes.
In a letter sent to HUD Secretary Alphonso Jackson, NAR President Pat
Vredevoogd Combs strongly urged action by HUD to change FHA rules and waive
the requirement that a homeowner’s mortgage be “current” in order to
refinance into an FHA loan product.
“Many homeowners who were able to make timely payments under the
original terms of their loan are finding it difficult to make payments
after rate adjustments,” said Combs. “We believe FHA can design a mechanism
where credit worthy borrowers could refinance subject to prudent
guidelines, and therefore avoid losing their homes.”

[Sapiens]

Lawmakers propose aid for subprime borrowers

http://www.reuters.com/article/ousiv...ubprime_crisis

WASHINGTON (Reuters) - The federal government should offer troubled borrowers hundreds of millions of dollars to bail them out of subprime mortgage loans, several leading Democratic lawmakers said on Wednesday.

"The federal government can send in an infusion of (money) to prevent foreclosure," said Charles Schumer, a New York Democrat.

The cash infusion is needed right away and should go to both help fund community groups aiding troubled borrowers and to directly fund bailouts, Schumer said.

Schumer spoke as chairman of the Joint Economic Committee, a joint committee of Congress, and appeared with Democratic senators Robert Menendez of New Jersey and Sherrod Brown of Ohio.

"All three of us are on the banking committee ... We will be proposing significant amounts of dollars to go here and do this. Could not tell you how much, but in the hundreds of millions of dollars for sure. Maybe more than that," Schumer said

Can someone find out who are the biggest campaign contributors to these people...?

[Sapiens]

New Jersey Lawmaker Seeks Subprime Foreclosure Halt

http://www.bloomberg.com/apps/news?p...d=a6tUxQYHVHbU

April 11 (Bloomberg) -- New Jersey should stop all evictions and foreclosures against homeowners with subprime mortgages from certain lenders for as long as six months, a state lawmaker said today.

Legislators and state law and banking department officials need time to understand how problems with subprime loans could affect New Jersey, Assemblyman Neil Cohen said in a statement. Cohen, a Democrat from Union, sent a letter to state Attorney General Stuart Rabner asking him to issue the moratorium.

So much for the free markets...LOL

Not to worry, all those MBS are held by institutions, pension funds, whatever...no real people, right?:rolleyes:

[Sapiens]

Re: N.J. senator wants to aid subprime borrowers

Oh wow, see Sen. Schumer top campaign contributors by industry, LOL, this is too easy.

http://www.opensecrets.org/politicia...093&cycle=2006

The top industries supporting Charles E. Schumer are:
1 Securities & Investment $2,507,200
2 Lawyers/Law Firms $2,009,721
3 Real Estate $1,529,498
4 Commercial Banks $549,249
5 Misc Finance $534,248

CHARLES E. SCHUMER (D-NY)
Top Contributors
1 JP Morgan Chase & Co $129,800
2 Merrill Lynch $127,000
3 Bear Stearns $126,400
4 Citigroup Inc $111,550
5 Morgan Stanley $109,500
6 Ernst & Young $101,800
7 Kasowitz, Benson et al $100,250
8 Goldman Sachs $90,590
9 UBS AG $89,500
10 Time Warner $87,500
11 Paul, Weiss et al $76,500
12 Credit Suisse Group $73,712
13 Lehman Brothers $72,500
14 Metropolitan Life $64,984
15 Sullivan & Cromwell $63,500
16 Bank of America $63,100
17 New York Life Insurance $60,000
18 Milberg, Weiss et al $56,750
19 Bank of New York $54,999
20 Guardsmark Inc $54,000

[DemonD]

Re: Lawmakers propose aid for subprime borrowers

Can someone find out who are the biggest campaign contributors to these people...?

I figured i'd talk to you on this thread sapiens so it doesn't look like you are talking to yourself. Senator Dodd from connecticut also has his main contributors from banking/finance industry.

Can you say "The foxes are guarding the hen house?"

[Sapiens]

Re: Lawmakers propose aid for subprime borrowers

I figured i'd talk to you on this thread sapiens so it doesn't look like you are talking to yourself.

Thanks! But I like for people to think that I am nuts, gives me an edge.;)

Senator Dodd from connecticut also has his main contributors from banking/finance industry.

Yeah, I saw that.

Can you say "The foxes are guarding the hen house?"

Amazing, isn't it?

[Sapiens]

Mortgage giants may help borrowers

http://news.yahoo.com/s/ap/20070417/...7MVuUl25Ss0NUE

Mortgage giants may help borrowers By MARCY GORDON, AP Business Writer
38 minutes ago



WASHINGTON - The heads of Fannie Mae and Freddie Mac said Tuesday the mortgage finance giants are developing new types of loans to help distressed borrowers with high-risk mortgages keep their homes at a time of rising foreclosures.

[Sapiens]

Federal Regulators Encourage Institutions to Work with Mortgage Borrowers Who Are Una

http://www.federalreserve.gov/boardd...17/default.htm

For Immediate Release
April 17, 2007


Federal Regulators Encourage Institutions to Work with Mortgage Borrowers Who Are Unable to Make Their Payments
The federal bank, thrift and credit union regulatory agencies are encouraging financial institutions to work with homeowners who are unable to make mortgage payments. Prudent workout arrangements that are consistent with safe and sound lending practices are generally in the long-term best interest of both the financial institution and the borrower. Institutions will not face regulatory penalties if they pursue reasonable workout arrangements with borrowers.

Borrowers who are unable to make their mortgage payments should contact their lender or servicer as soon as possible to discuss available options. Examples of constructive workout arrangements include modifying loan terms, and/or moving borrowers from variable-rate loans to fixed-rate loans. Bank and thrift programs that transition low- or moderate-income homeowners from higher-cost loans to lower-cost loans may also receive favorable consideration under the Community Reinvestment Act (CRA), provided the loans are made in a safe and sound manner. Federal credit unions are exempt from CRA requirements.

The agencies want to remind their institutions that existing regulatory guidance and accounting standards do not require immediate foreclosure on homes when borrowers fall behind on payments. In addition, under the Homeownership Counseling Act, institutions are required to inform delinquent borrowers about the availability of homeownership counseling. Institutions should also consider working with reputable consumer-based organizations to help financially stressed borrowers avoid predatory foreclosure rescue scams.

The agencies' statement is attached.

http://www.federalreserve.gov/boardd...attachment.pdf

[Sapiens]

Lenders act to limit US foreclosures

http://news.yahoo.com/s/csm/20070426/ts_csm/aloanhelp

By Mark Trumbull, Staff writer of The Christian Science Monitor
Thu Apr 26, 4:00 AM ET



The home-loan industry, facing the worst housing downturn since the early 1990s, is ramping up efforts to help strapped borrowers stay in their homes.

The goal is to restrain a gathering wave of foreclosures that carries big costs for both lenders and borrowers.

This rescue effort isn't expected to save every at-risk homeowner. But it promises to reduce monthly payments for many who have fallen behind on mortgages. In the process, it could help to stabilize a struggling real estate market.

So far the housing slump, precipitated in part by overzealous borrowing and subprime lending, continues its downward slope. In discouraging news for homeowners and homesellers nationally, a report Tuesday showed "the deceleration and declines in home prices are showing no signs of turnaround." Citing February data, Standard & Poor's Case-Shiller index of housing prices in 10 cities posted a 1.5 percent drop from February 2006 – an annual decline not seen in 15 years.

That news follows hard on a revised 2007 price forecast by the National Association of Realtors. NAR said this month it no longer expects the median price of an existing home to rise this year, predicting instead a 0.7 percent decline. The slower recovery, it said, is a result of "tighter lending criteria and fallout from the subprime loan debacle."

Some lenders offer to refinance
Impelled by financial and political pressures to try to curtail foreclosures, lenders are taking action on several fronts:

• Fannie Mae, America's leading mortgage lender, says it plans to help as many as 1.5 million "subprime" borrowers – people with low credit ratings – refinance out of high-interest loans.

• Freddie Mac, which like Fannie Mae is a government-backed corporation, is creating new products to make homes more affordable to buyers with poor credit. Freddie Mac doesn't make loans directly but pledges to buy as much as $20 billion worth of these mortgages from participating lenders.

• Washington Mutual, another giant lender, says it will refinance $2 billion in subprime loans, helping borrowers avoid foreclosure. The new loans will come with below-market interest rates.

• Some finance companies are partnering with nonprofit organizations that act as advocates for at-risk borrowers.

• In addition to efforts by specific companies, the Mortgage Bankers Association announced a foreclosure-prevention campaign in partnership with the nonprofit group NeighborWorks America. They will link homeowners to a free counseling hotline (888-995-HOPE) provided by the Homeownership Preservation Foundation, boost the capacity for homeownership counseling within NeighborWorks, and conduct a national ad campaign for homeowners in financial distress.

All of this represents significant relief, but the magnitude of the problem is large and growing.

"We're struggling to provide help" to troubled borrowers, says Robert Pulster, who heads a Boston nonprofit group called Ensuring Stability through Action in our Community. "We're seeing double the problem that we were seeing last year."

The lenders themselves are careful not to overstate what the new projects can achieve. "While these efforts will help cushion the expected rise in foreclosures, we need to be clear that these offerings are not a panacea," said Richard Syron, chief executive of Freddie Mac, as he unveiled the new products at a congressional hearing April 17.

Even when the economy and the housing market are strong, some borrowers run into financial difficulty because of events such as job loss, divorce, or illness.

Over the past year, two other factors have driven the rise in past-due loans and foreclosure filings.

One is known as "payment shock," when adjustable-rate loans reset sharply upward. Lenders in recent years failed to consider whether the borrowers will be able to afford their loans once initial "teaser" rates adjust, critics charge.

The other is simply that a decade-long housing boom stalled out. Some who bought homes near the market peak – often with no down payment – owe more than the house is now worth. So selling it offers no sure escape route from foreclosure.

But foreclosure is costly for lenders, chewing up tens of thousands of dollars in missing loan payments, home-sale expenses, and property maintenance. If foreclosures are concentrated in a community and drag down home values, that's bad for lenders' business prospects.

Politicians have been prodding lenders to help at-risk homeowners. In congressional hearings, Democrats have bashed the mortgage industry for helping to create the problem. Nonprofit organizations have added to the pressure.

Rita Askew, safe at home
Rita Askew of Evanston, Ill., is one borrower who remains in her red-brick townhouse thanks to help from her lender and community groups.

Her husband, the family breadwinner, had to leave his school-maintenance job for several months last year because of an accident. "I probably would have been selling my house," Mrs. Askew says, if the National Training and Information Center (NTIC) hadn't stepped up for her.

NTIC helped win a loan-modification accord that cut the monthly payment from $1,668 to $1,117. The interest rate dropped from 10.6 percent to 6.0 percent.

Several major lenders, including Ocwen Financial Corp., CitiFinancial, and Select Portfolio Servicing Inc., have agreed to partner with NTIC to negotiate "workout" deals when possible for troubled loans.

But for people who face difficulty paying their mortgages, the choices can narrow quickly if the loans go unpaid for a month or more.

Borrowers can seek a traditional refinance deal with any lender. They can seek temporary forbearance or a loan modification deal. Some can successfully sue the lender, showing that the original loan process violated state or federal laws. Or they can try to sell the home, perhaps talking the lender into accepting proceeds that fall short of the loan balance due.

Housing advocates say to beware of "rescue" scams, outfits that charge big fees and then fail to help people stay in their homes.