US goes Commie and China goes Capitalist !!

[K2]

So today's joint effort by Bush and Bernenke to prop up the ailing US property market is a shocker!!

Here you go ...

President George W. Bush today pledged to help people who've fallen behind in their mortgages keep their homes and to tighten safeguards against predatory lending, while rejecting a bailout for ``speculators.''

``I plan to help homeowners, the government's got a role to play,'' Bush said in a statement at the White House. But, he said, ``it's not the government's job to bail out speculators, or those who made the decision to buy a home they knew they could never afford.''

Bush said he will let the Federal Housing Administration, which insures mortgages for low- and middle-income borrowers, guarantee loans for delinquent borrowers, allowing them to avoid foreclosure and refinance at more favorable rates.

Tighter credit and higher borrowing costs threaten the housing market, which has been an engine of U.S. economic growth. At the end of last year, there were 7.5 million subprime mortgage borrowers with $1.4 trillion in loans, according to the Center for Responsible Lending, a research organization in Durham, North Carolina. More than 2 million Americans will lose their homes as introductory interest rates on mortgages reset to higher levels in coming months, according to the center.

Rising Foreclosures

The number of U.S. homes under foreclosure almost doubled in July from a year earlier as homeowners with adjustable-rate mortgages struggled to meet their rising monthly payments, RealtyTrac Inc., a seller of foreclosure data, said on Aug. 21.

Subprime and Alt-A mortgages made up 40 percent of loan originations last year. Alt-A mortgages are available to borrowers with good credit who can't or choose not to verify their income with pay stubs or tax forms. Subprime borrowers make up 13 percent of the total U.S. mortgage market, according to Federal Reserve Chairman Ben S. Bernanke.

Democrats in Congress and the party's presidential candidates have criticized Bush for not taking action to prevent the spread of foreclosures.

Senator Chuck Schumer of New York, a Democrat, said U.S. Treasury Secretary Henry Paulson indicated interest in allowing Fannie Mae and Freddie Mac, the two largest U.S. mortgage finance companies, to exceed federal limits on their combined $1.4 trillion mortgage portfolios so long as they channel the extra financing to help borrowers refinance and avoid foreclosure.

``Paulson said he would be interested in that,'' Schumer said in a news conference today in Washington. He said he talked to Paulson today about housing and mortgage finance. Under the proposal, the federal government would raise the companies' portfolio limits ``but only for specific loans for homeowners about to go into foreclosure.''

FHA Program

Bush said that ``in the coming days'' the FHA will begin a new program called FHA Secure that will permit homeowners who have a good credit rating but can't afford their current payments to refinance into FHA-insured mortgages.

``This means that many families who are struggling now will be able refinance their loans, meet their monthly payments and keep their homes,'' Bush said. ``We going to start reaching out and make sure people know this option is available to them.''

Henry Savage, president of PMC Mortgage Corp. in Alexandria, Virginia, said, ``It's very well-timed that FHA emerge as a viable alternative to conventional lenders.''

``They're stepping in and providing mortgage products that they used to offer but had been taken over in the last 20 years by conventional lenders,'' he said. ``Now that private lenders are dropping out of that, FHA is stepping in.''

Help for Cities

``It will especially help the bigger cities where home prices are highest, but it will help almost any area,'' Savage said.

In the first quarter of this year, FHA serviced about 3 million mortgages, 12 percent of which were delinquent or in foreclosure. Nationwide, the Washington-based Mortgage Bankers Association reported about 34 million mortgages in existence with an overall delinquency rate of 2.6 percent.

For the first quarter there were about 5.9 million subprime loans outstanding, about 14 percent of which were delinquent or in foreclosure, according to the Mortgage Bankers Association

Bush's plan would affect borrowers who are at least 90 days behind in payments and let them stay in their homes. He also said he'll propose changing the tax code to aid refinancing.

The president gave no estimate on the cost of his proposals. He said he also will support proposals in Congress to provide tax relief for homeowners who refinance.

U.S. home resales fell in July to an annual pace of 5.75 million, the slowest since November 2002, the National Association of Realtors reported on Aug. 27. Sales have declined for five consecutive months.

About 14 percent of banks raised standards for mortgages to their most creditworthy borrowers and 56 percent made it more difficult for people with limited or tainted records to get loans, according to a Federal Reserve survey of senior loan officers in mid-July.

Meanwhile in China ....

Capitalism reigns supreme - Shanghai A shares up 158% YTD!!


Risk (funnily enough) requires a RISK premium ... something that has almost vanished in the last 3 years ... all the focus on (largely red herring non-existent) "terrorism" and now green agenda ... meanwhile the real ugly monster is the borrowed up to the hilt US homeowner thats threatening to blow the system from the inside.

[marc26]

Originally Posted by K2

``it's not the government's job to bail out speculators, or those who made the decision to buy a home they knew they could never afford.''

.

um....George, a huge % of people you will be bailing out bought homes they knew they could never afford

he was his usual bumbling self in the speech

it actually sounded like he mistakenly said "horseshit"

[spartan]

Boom of condo crash loudest in Miami -- South Florida Sun-Sentinel.com

Made me cry in my cereal this morning, poor speculators.

[JayBee]

Basically, he is saying let's take your honest, hard-earned tax dollars, Mr. Taxpayer, and use them to bail out the dishonest borrowers, who got their loans by committing fraud, claiming their income was double or more than it really was so that they would qualify to borrow the money. And also we'll bail out the lenders, who would have been stuck with a loss on a foreclosed property, even though they encouraged the fraud, with their loan practices, which actually told borrowers, "Here's how much income you need to state you make in order to get the loan. BTW, write down any amount you want, we are not going to check up on you(it's OK to lie)." I know cases where people let the lender fill out the application for them, then, at the closing, when they were presented with it for their signature, burst out laughing at the amount of income it said they were making. The lenders knowingly encouraged fraud, because they made obscene amounts of money for fees on loans they never could have made, if not for the buyers' fraudulent representations about their income.

As usual, the liars, cheats, and idiots are rewarded for fraud and stupidity, at the expense of the honest taxpayer. It's the American way!

And the people who were honestly making enough money to qualify for their loan, got screwed royally by the high prices they paid for homes, due to prices being pushed up by high demand from the people who would not have even been seriously in that market, if they were required to be honest about their income. All the fraud pushed prices far higher than they would have gone in an honest market. And the bailout is largely to keep the prices high, so consumers can continue to borrow on equity and spend. And there are still plenty of lenders wiling to lend the money on the same "we won't check on whatever you tell us" basis.

[marc26]

Originally Posted by JayBee

Basically, he is saying let's take your honest, hard-earned tax dollars, Mr. Taxpayer, and use them to bail out the dishonest borrowers, who got their loans by committing fraud, claiming their income was double or more than it really was so that they would qualify to borrow the money. And also we'll bail out the lenders, who would have been stuck with a loss on a foreclosed property, even though they encouraged the fraud, with their loan practices, which actually told borrowers, "Here's how much income you need to state you make in order to get the loan. BTW, write down any amount you want, we are not going to check up on you(it's OK to lie)." I know cases where people let the lender fill out the application for them, then, at the closing, when they were presented with it for their signature, burst out laughing at the amount of income it said they were making. The lenders knowingly encouraged fraud, because they made obscene amounts of money for fees on loans they never could have made, if not for the buyers' fraudulent representations about their income.

As usual, the liars, cheats, and idiots are rewarded for fraud and stupidity, at the expense of the honest taxpayer. It's the American way!

And the people who were honestly making enough money to qualify for their loan, got screwed royally by the high prices they paid for homes, due to prices being pushed up by high demand from the people who would not have even been seriously in that market, if they were required to be honest about their income. All the fraud pushed prices far higher than they would have gone in an honest market. And the bailout is largely to keep the prices high, so consumers can continue to borrow on equity and spend. And there are still plenty of lenders wiling to lend the money on the same "we won't check on whatever you tell us" basis.

um.....Jaybee....i seem to remember you stating that you have faciltated many of these real estate purchases of people who couldnt afford it and you knew were lying on their application

[brit]

* Thursday, August 9: Federal Reserve injects $30 billion.
* Friday, August 10: Injected $38B.
* Monday, August 13: Injected $5B.
* Wednesday, August 15: Injected $7B.
* Thursday, August 16: Injected $17 billion.
* Thursday, August 23: Injected $17 billion.

Including some others it's running at over $120 billion in total. Hyperinflation FTW

[K2]

Originally Posted by JayBee

And the people who were honestly making enough money to qualify for their loan, got screwed royally by the high prices they paid for homes, due to prices being pushed up by high demand from the people who would not have even been seriously in that market, if they were required to be honest about their income. All the fraud pushed prices far higher than they would have gone in an honest market. And the bailout is largely to keep the prices high, so consumers can continue to borrow on equity and spend. And there are still plenty of lenders wiling to lend the money on the same "we won't check on whatever you tell us" basis.

Pretty good summing up there JB - eventually this will end in tears - prolonging the process by lowering interest rates and bailing out sub-prime (shite) borrowers/lenders is not a happy formula. The Darwinian element of capitalism rings true and preventing a purge now will only create a bigger problem down the road ... markets do have to go down as well as up ... its the natural law!

[JayBee]

Originally Posted by marc26;

um.....Jaybee....i seem to remember you stating that you have faciltated many of these real estate purchases of people who couldnt afford it and you knew were lying on their application

I do not make the rules. Nor am I in the lending business. Not in the law enforcement business, either. Nor am I a "grass"(snitch)!!

[JayBee]

Originally Posted by K2;

Pretty good summing up there JB - eventually this will end in tears - prolonging the process by lowering interest rates and bailing out sub-prime (shite) borrowers/lenders is not a happy formula. The Darwinian element of capitalism rings true and preventing a purge now will only create a bigger problem down the road ... markets do have to go down as well as up ... its the natural law!

Amen!! Don't f*ck with Mother Nature!