Bush Unveils Sub-Prime Assistance

We have 600 trillion in world liabilities plus more than a 400 trillion-derivatives neutron bomb, all of which will go off when the Westerners (from EU and US) will no longer be able to borrow.

www.opednews.com...

They're buying their buddies time to shift assets to gold and commodities. The poor sheeple just keep handing over the retirement money because of the 'great news' from the government.

Even if everyone does stay in their over leveraged home, the 'consumers' are gone. Nothing to drive the world wide debt bubble!

Even if the government doesn't do anything is still going to be bad, specially with so many predators going after the home owners in crisis.

At least an effort is been made to give more time to some homeowners that can prove that their situation is not due to personal mismanagement but bank failures to disclosures.

This problems with the housing is not going to end next year, this a long term situation that will take several years to fix if it ever gets fixed.

Yes it sounds like a bail out for the bankers as usual but what else is there?

With $361 billion in subprime loans made to borrowers with weak credit resetting at higher interest rates next year, foreclosures will peak in the third quarter of next year and won't drop back to more normal levels until 2011, said a Blank of America Securities report out last month. The report also estimated the median U.S. home price would fall 15 percent over the next four years and not rebound until 2012.

www.rawstory.com...

This is why they are doing the 5 years freeze.

Believe it of not this is a crisis what our nation is experiencing.

[edit on 6-12-2007 by marg6043]

I read this last night and have been trying to absorb it all and make sense of what is really going to happen and I'm a little confused.

first I understand that bailout will be for only "owner occupied" homes
who have "no late payments" or "deliquency" on their accounts
and they will get a "five year freeze on rates"

okay, so my understanding the first part makes sense... owner occupied, that gets rids of the speculative investors who were just flipping properties.

But then "no late payments".... aren't the majority of these people in trouble already and that's why we're having a bailout?

And then the "freeze on rates"... which rates are they freezing, the super low teaser rate these people signed up with? or the current rate as of today or the day the program goes into effect?

reply to post by worldwatcher



i think it will apply to those buyers who have a track record 'proof' that the scheduled increase will put their new mortgage payment out of reach of their income...and lead to a foreclosure.

there will be all sorts of fraud to pare away actual family income
so as to fall within the guidelines of this 'rescue/bail-out policy'
#2 or 3: those households who cannot afford to change their existing mortgage toone of those FHA/HUD "Secure" mortgages, should automatically be covered by this (politicaly savvy) temporary ARM
increase Freeze.

~a whole lot of bluster and no substanance will be the result we'll see~

I always say that nothing the government do is for the benefit of the citizens but for the benefit of the entities that our government favor over the citizens needs.

Reform is needed to show at least that the government cares.

What utter crap. If a guy is a heroin addict the sure way to cure him is to give him more heroin :shk:

These guys (and gals) gambled as did thier mortgage companies. They lost. Now its time to pay the piper. Look I left some $$$$ in vegas a few weeks ago. Should I know lobby the pres to work out a deal to get my money back?

Lets see, I did without all the toys, I paid MORE to get a fixed 30 year mortgage, I lived WELL within my means and someone who did none of these things, benifted by paying less to get a nicer home, NOW gets a helping hand.

reply to post by FredT


No Fred it doesn't work this way, is people that are losing their homes that are part of the population that are falling victims to the economy woes.

No everybody that are losing home are irresponsible is many other factors involved.

Remember that the only ones here that are benefiting from anything the government does is corporate groups involve in the mess that caused this housing crisis.

this economy is a paper tiger, are strength is the threat of american military power and the influence the shadow banking system's tentacles exert which extend to JP morgan, Goldman Sachs and the like, they supply credit as well as tell the bank of japan what and when to act to support the carry trade.

Great care must be taken to unravel this mess slowly.

The bottom line is the standard of living is destined to go down in the united states.

hopefully this bailout program works better than the SIV investment fund.

we live in a very imperfect world where people can choose to live in ignorant bubbles with little consequence, their may be a lot of disorder when the pain of poverty multiply's. There will probably be a war to divert anger.

Gold and silver are destined to SKY, but martial law remains a serious threat in the medium term and the aforementioned metals may be confiscated



[edit on 6-12-2007 by cpdaman]

Absolutely right. What this does is give the big financial corps an extra 5 years until they have to write down the losses. We've just seen 3 months of them all scrambling to save their asses and the Fed pumping billions into the market to shore it up, buyouts and write-downs and restructuring going on everywhere. The forecast was for the poop to really hit the fan next year when the foreclosures are actually finalized and the losses appear on the balance sheets.

By holding that off for 5 more years, they're not saving the homeowners they're saving the investment bankers.

Not trying to turn this thread into another 2012 topic or whatever.....but has anyone realized that 5 years from now puts the debacle firmly in the grasps of the time frame everyone is so worried about?

Just a couple weeks shy of December 21, 2012. Now honestly, I truly am not knowledgeable enough to contribute to financial threads in a meaningful way, I just thought I'd throw that interesting tid-bit of information out there for everyone to feed on. But if the crap hits the fan right about now 5 years from now, when the banks finally have to write down there losses, what kind of repercussions can we expect to see? Personally and Economically....?

Btw, First Post.....I love this forum!

This just in:

xXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

"President Bush, announcing the initiative Thursday, said 1.2 million homeowners could be eligible for relief, which includes the rate freeze and helping people refinance into more affordable mortgages. The Center for Responsible Lending, a group that promotes homeownership and works to curb predatory lending, estimates that only 145,000 households will qualify for the rate freeze. The criteria is too strict, it says."


www.msnbc.msn.com...

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

So out of the 2 million mortgages that will reset in the 2008, only 145,000 are eligable, Or 7.25%.

I don't see this as helping the homeowners, I'm curious about what this does to and for the lenders, and securities investors.

Cheers,

Camain

reply to post by cavscout


LOL! good call bout the ron paul thing haha made me laugh out loud LITRALLY! Neways yeah hes just helping lull people into a false sense of security to get them deeper into debt. "Tighten those handcuffs boys!!"

[edit on 7-12-2007 by ka0s69]

[edit on 7-12-2007 by ka0s69]

I find interesting how gullible we have become as a nation that is supposed to be ruled by its citizens.

We are seen how the blame for our economic crisis has been dumped on the housing markets having a hart attack.

We have been geared to believe that this is the fault of the citizens (homeowners), when we all know who is behind all this mess.

We see how our government is trying to divert attention from the real economical factors involved here

We have loss millions of jobs to outsourcing, we have an almost none none existent industry and wealth builders, on top of that we have a trillion dollar deficit and a very expensive war.

We have become a nation of expenders and dependants of foreign made goods and oil.

This is what our corporate ruled government has done to us the citizens of this nation because we have allowed this to happen

America is the nations of the American citizens our jobs is to protect our nation from people like the one that has taken over our political system, our own constitution give us that right.

But we are nothing than grain of salt on the sea of nowhere, because we have been programmed too distrust each other.

How come Connecticut is doing something to fix their state housing problems? but everybody else is waiting for federal assistance to get their heads out of their butts.

Connecticut Governor Rell Unveils $50 Million “CT FAMLIES” Refinancing Program to Assist Subprime Borrowers
Fri, 11/09/2007 - 09:27 — newsdesk

November 8, 2007 -- Connecticut Governor M. Jodi Rell today announced “CT FAMLIES” -- a new $50 million refinancing program to address the subprime mortgage crisis in Connecticut. There are approximately 71,000 active sub-prime mortgages in Connecticut and many are delinquent and in danger of default. Approximately 21,000 of these adjustable rate (sub-prime) mortgages are scheduled to reset at much higher rates between October 2007 and December 2009

.

www.allamericanpatriots.com...

This is a state per state crisis and it should be to the state to help their people.

This crisis is the fault of the predatory practices of our corrupted banking system and the only victims is the gullible citizens that have fall for it.

“Many of these families are low- and moderate-income households and many were first-time buyers. This issue is about protecting the most important investment many of these families have ever made. Homeownership is the American Dream and it is a dream we have an obligation to protect and secure.”

.

What will our nation become as more American citizens lose their American dream? What will happen?

Think about it, loss of jobs, loss of industries and a trillion dollar deficit plus a war.




[edit on 7-12-2007 by marg6043]

reply to post by Gools


I totally agree with you. You hit all the major points. All this will do is encourage business to make crappy loans and people who aren't sophisticated to take them when they cannot pay. And who gets hit with the bill? Everyone who will be hurt by the recession these people are causing.

reply to post by worldwatcher


Some more information was published by the Wall Street Journal today:

Battle Lines Form Over Mortgage Plan

In unveiling a plan to help more than one million struggling homeowners, the Bush administration and the mortgage industry have embarked on a controversial project: picking winners and losers from the rubble of the subprime-mortgage meltdown.

...the industry would voluntarily help as many as 1.2 million homeowners who are heading for trouble paying their subprime mortgages but aren't yet lost causes. For some homeowners, loan-servicing companies will agree to freeze mortgages at their low introductory rates. In other cases, credit counselors or loan servicers will walk mortgage holders through refinancing processes.

The deal won't provide relief to many subprime-mortgage holders: These include borrowers who are now in foreclosure, have already refinanced their homes or are more than 60 days delinquent on more than one payment over the past year. In some cases, people with good credit scores will be excluded. Also left out are those deemed able to afford the higher interest rates scheduled to replace their introductory rates over the next two years.

...1.2 million borrowers relatively current in their mortgages will be considered .... Some 600,000 borrowers are expected to qualify... 600,000 of the subprime borrowers ... are likely to lose their homes, or, in Mr. Paulson's words, "become renters."

More on this story.

A New American Entitlement: Eisenhower Interest Rates

The White House is set to endorse a bank-engineered plan ['nuf said!] to freeze interest rates on high-risk mortgages, and altogether ratchet up the level of nanny statism in a housing market already awash in Federal cronyism.

The negative implications of this rescue are hard to overstate.

Billions of dollars of contracted loan payments are going to be forgiven at the stroke of a pen for the supposed cause of keeping people in their homes. Distressed but responsible borrowers have exited the market or reduced their exposure already. Now they find out that they should have gamed the system a little longer. After all, the benefits will accrue overwhelmingly to those who least deserve it, chief among them the lenders who established the loans.

Stay away from these securities. This mess is far from cleaned up, and the distortions resulting from government intervention on this scale cannot be understood without hindsight.

The blow this administration has just dealt to the sanctity of private contract law is being commented on in many places and, just as predicted, the fallout is starting to hit the markets.:

Bush's Subprime Mortgage Freeze Stymies Bond Market

President George W. Bush's plan to freeze interest rates on some subprime mortgages may prove to be a cure that breeds another disease.

"If the government goes in and changes contracts it will definitely have a chilling effect on the securitization of mortgages," said Milton Ezrati... "When the government comes in and says you have contracted to have this arrangement and you can no longer have it, I think it opens the door for lawsuits."

"...there's less confidence in the viability in the bond markets and the mortgage markets going forward and it could lead to higher interest rates and higher mortgage rates for everybody,'' said Kenneth Hackel

"We do not think it is hyperbolic to say that the sanctity of such contracts, entered into in good faith, is at the cornerstone of capitalism,'' Deutsche Bank AG analysts Karen Weaver, Katie Reeves and Ying Shen, based in New York, said in a note to clients today. "And if we are to in anyway devalue that sanctity, we face a far greater liquidity crunch than the one in which we currently find ourselves.''

"We have a voluntary program that is mostly smoke and mirrors and probably won't freeze enough mortgages to make a difference, but the bond market is reacting negatively, which will make it harder to sell mortgage backed securities,'' Bob Yopko"

There's lots more in the press today if one cares to look.

The sole fact that the President of the United States had to give a speech to announce what amounts to emergency price controls is an indication in and of itself of just how dire the situation really is in the economy.

After this there shouldn't be anybody left who can argue that the economy is strong or not as bad as all the "doom and gloomers" are making it out to be.

Well... maybe one or two...


.

[edit on 12/7/2007 by Gools]

reply to post by Gools


We should pat our backs because we have seen this coming, right? for as long as I can remember I have called our economy an illusion.

Million of people to become renters?

Now the new predators will be waiting to offer their outrageous prices in the renting business.

What a boom for the landlords

I wonder, if people can not afford their homes . . . will they be able to afford to pay rents?

Are we to see the new boom on the manufactured home business as people that try to find where to live?

Better to own a mobile home than pay rent to a landlord.

So how many people believe that this action might slow price declines in the short term? I think there is a chance it might give some psychological benefit, because lets face it, 80% of economics is psychology. Of course, I don't think this plan has any merit beyond the psychological, but as we know, most people are suckers and will think that uncle Sam can actually rescue them.