The story on CNN was short on details. AFAICT, the refinancing is going to be offered by Freddie and Fannie (i.e., you and me) and the limit on mortgage/home value is going to be raised to 175%.
That should be worth a vote or two in Michigan and Nevada.
Early estimate is that 9 million households would qualify.
We should instead cut taxes for the wealthy and corporations. No need to spend money on these (largely middle-class) families.
:yucky:
Don't know if this is the same program.
Quote
HUD has approved a program aimed at putting foreclosed homes back into the hands of owner-occupant buyers.
In select states, from now into October of next year, buyers need a down payment of only $100 to purchase a HUD-owned REO home.
The buyer must be an owner-occupant, utilizing financing insured by the Federal Housing Administration (FHA). Standard FHA underwriting guidelines apply, and the sale must be for the full amount of the current list price.
The $100 down payment incentive program has been approved for two of HUD's four national regions – the regions managed by the Denver Homeownership Center and the Atlanta Homeownership Center. HUD homes in the states listed, as well as the Caribbean are currently eligible for the program.
Denver Homeownership Center's Jurisdiction:
* Arkansas
* Colorado
* Iowa
* Kansas
* Louisiana
* Missouri
* Minnesota
* Montana
* Nebraska
* New Mexico
* North Dakota
* Oklahoma
* South Dakota
* Texas
* Wisconsin
* Wyoming
* Utah
Atlanta Homeownership Center's Jurisdiction:
* Alabama
* Florida
* Georgia
* Kentucky
* Illinois
* Indiana
* Mississippi
* North Carolina
* South Carolina
* Tennessee
* Caribbean
HUD's $100 down payment incentive program can also be applied to an FHA 203k loan, which can be used to fund repairs and renovations on the home. The 203k program allows buyers to finance both the mortgage and additional money for rehabilitation needs with a single government-insured loan.
Matt Martin, CEO of Matt Martin Real Estate Management (MMREM), says this is one of the most exciting features of the new incentive program and should drive a lot of exposure to FHA's 203k offering.
MMREM is under contract with HUD to assist with disposition sales of its repossessed homes. MMREM handles properties throughout 16 states, or about a third of HUD's REO portfolio.
With an FHA 203k loan, "buyers can find a property that needs some TLC, fix it up however they want to, and finance the whole thing for $100," Martin explained.
"MMREM is excited to work with this recent initiative, in a way that it supports putting HUD homes back into the hands of homeowners," Martin said.
In addition to $100 down instead of FHA's typical 3.5 percent down payment, HUD says it will also cover up to 3 percent of the closing costs in most cases.
How far can you leverage a single benjamin? :P
Ah, this must be the one you meant:
http://www.huffingtonpost.com/2011/10/24/foreclosure-plan-obama-harp-refinancing_n_1028554.html
My former hometown (Fairborn Ohio) has been using federal grant money for a home and neighborhood revitalization program. Buying up such gems as a two story house that had no stairs to the 2nd floor and other foreclosure bargains. They ended up demolishing most of those and building new homes. Which stick out like a sore thumb in neighborhoods of mostly 50's housing.
Why my tax money have to be used to bail out losers?
Fuck no.
Quote from: Siege on October 24, 2011, 06:16:43 PM
Why my tax money have to be used to bail out losers?
Fuck no.
:shutup:
Quote from: Siege on October 24, 2011, 06:16:43 PM
Why my tax money have to be used to bail out losers?
Fuck no.
Eh. It's a fraction of what we spend on the losers of Israel, and doesn't piss off anyone important.
Won't do any more good than propping up Israel for a few more decades past its shelf-life, but we are talking tax dollars, and so minimizing the harm they do is what is important, not maximizing the benefit.
I have an idea:
How about tax cuts and debt relief for the middle class?
Surely we could get both the Dems and GOP to support that!
The limit is pretty useless, I mean 175% mortgage / home value is just insane. Even at the height of the bubble here, 125% was pretty much the max. Nowadays, you'd be lucky to get more than 90%.
Quote from: HisMajestyBOB on October 24, 2011, 07:40:37 PM
I have an idea:
How about tax cuts and debt relief for the middle class?
Surely we could get both the Dems and GOP to support that!
How about we give everyone in the US a million dollars and charge it to the deficit?
Quote from: Admiral Yi on October 25, 2011, 11:50:08 AM
Quote from: HisMajestyBOB on October 24, 2011, 07:40:37 PM
I have an idea:
How about tax cuts and debt relief for the middle class?
Surely we could get both the Dems and GOP to support that!
How about we give everyone in the US a million dollars and charge it to the deficit?
I'm fine with that.
Quote from: Admiral Yi on October 25, 2011, 11:50:08 AM
Quote from: HisMajestyBOB on October 24, 2011, 07:40:37 PM
I have an idea:
How about tax cuts and debt relief for the middle class?
Surely we could get both the Dems and GOP to support that!
How about we give everyone in the US a million dollars and charge it to the deficit?
Would have been cheaper than what we did.
Quote from: Admiral Yi on October 25, 2011, 11:53:27 AM
Quote from: MadImmortalMan on October 25, 2011, 11:52:44 AM
Would have been cheaper than what we did.
What did we do?
Home buyer tax credit, cash for clunkers, TARP, ARRA, POMO, QE1, QE2, etc, etc, etc, ABCDEFG...
Quote from: MadImmortalMan on October 25, 2011, 11:56:22 AM
Home buyer tax credit, cash for clunkers, TARP, ARRA, POMO, QE1, QE2, etc, etc, etc, ABCDEFG...
You're just being silly.
This seems sensible, based on what Yi said. I could do with more details though :mellow:
Yes, making sure that people who cannot afford to buy a house can still have a mortgage can only end well, as history can show us.
Quote from: Berkut on October 25, 2011, 12:21:19 PM
Yes, making sure that people who cannot afford to buy a house can still have a mortgage can only end well, as history can show us.
You can leverage a one hundred dollar bill 2000%! That's super-duper better than anything out there. Not daytrade brokerage accounts, not EFSF, not Basel II, nothing.
Quote from: Berkut on October 25, 2011, 12:21:19 PM
Yes, making sure that people who cannot afford to buy a house can still have a mortgage can only end well, as history can show us.
I'm generally pretty leary of this idea, but one thing that mitigates is that the program is open only to borrowers who have not missed a payment.
Kinda wacky that we have 9 million underwater borrowers who haven't missed a payment.
Quote from: Admiral Yi on October 25, 2011, 12:26:16 PM
Kinda wacky that we have 9 million underwater borrowers who haven't missed a payment.
I'm one of those. :lol:
It doesn't surprise me, actually. 70% of my city is underwater on their mortgages.
Edit: A million bucks for everyone would certainly solve the deleveraging problem...
Refinancing a mortgage that even way underwater can make sense. since you can't just dump your house and move somewhere else. Your credit rating is going to be too shot to take another mortgage.
That said, I'm afraid that this measure will just let the insolvency fester for that much longer, in a Japanese kind of scenario. Ultimately, if your mortgage is underwater, you're a prisoner in your own home, even if you can handle the payments, and that can't be good when that's multiplied by millions. There is no quick fix for the problems of liabilities exceeding your assets, without high inflation or wholesale debt write-down.
Quote from: Admiral Yi on October 25, 2011, 12:26:16 PM
Kinda wacky that we have 9 million underwater borrowers who haven't missed a payment.
Well that is an awful lot but it is possible with the popping of the bubble. Tons of recent buyers would have been stuck in that position.
Quote from: Admiral Yi on October 25, 2011, 12:26:16 PMI'm generally pretty leary of this idea, but one thing that mitigates is that the program is open only to borrowers who have not missed a payment.
Kinda wacky that we have 9 million underwater borrowers who haven't missed a payment.
It sounds a great deal like some of what Glenn Hubbard's been saying in the FT.
Basically his argument is that problems in the mortgage market are cancelling out low interest rates, household wealth and income and that taxpayers have borne the credit risk of mortgages since 2008 anyway. For Fannie and Freddie mortgage holders, who are up to date on payments, to refinance at current low interest rates would, in his phrase, be the same as a long-term tax cut of around $70 billion a year (over the life of the mortgage). As defaults diminish the Treasury's exposure to risk would diminish substantially.
Meh. They chose to live underwater.
Quote from: Berkut on October 25, 2011, 12:21:19 PM
Yes, making sure that people who cannot afford to buy a house can still have a mortgage can only end well, as history can show us.
Well supposedly this is trying to close that door now that that particular horse has already gallopped off.
Of course it probably will be used as part of the bag of financial tricks used to get more people into homes they cannot afford somehow. Unintended consequences and all that.
Quote from: The Brain on October 25, 2011, 12:36:59 PM
Meh. They chose to live underwater.
Works for SpongeBob.