White House to Veto Foreclosure Bill

White House to Veto Foreclosure Bill
By ANDREW TAYLOR Associated Press Writer


Feb 26th, 2008 | WASHINGTON -- The White House promised on Tuesday to veto a bill seeking to follow up the recent economic stimulus package with several proposals to shore up the struggling housing market and reduce foreclosures.

Senate Democrats had hoped to begin debate on the housing bill on Tuesday but action has been put off until later in the week, if not later, as Republicans kept the subject on Iraq.

The Democratic housing bill would change bankruptcy laws to allow judges to cut interest rates and reduce what's owed on troubled borrowers' mortgages, provide $4 billion to communities to purchase and rehabilitate foreclosed homes, and improve disclosure of subprime mortgage loans in hopes that borrowers won't be surprised by big payment increases.

But the White House said the $4 billion for purchases of foreclosed homes is too expensive and "would constitute a bailout for lenders and speculators, while doing little to help struggling homeowners."

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http://www.salon.com/wires/ap/2008/02/26/D8V28ICG0_congress_mortgages/index.html

because that's who's getting foreclosed on around here. This coming year will see homeowners who occupy the houses as their primary residence catching it across the neck, plus next year for those jumbo mortgages in hot markets at the top of the market.

The relief for homeowners will come from a ruling today that called some of the subprime loans "inherently dishonest" when they were 3 points or more below the going prime rate as a teaser rate and reset in 3 years or less. That just about covers all the ARMs out there, at least the second part. Most do reset within 3 years.

I have a feeling most owners will be able to convert to standard mortgages at very little cost and at the rate they would have gotten when the "inherently dishonest" ARM loan was given. This is the kind of thing that will give real relief to homeowners and might even keep banks from going under.

Let's just hope the next Democratic administration re regulates the thieves out of the finance industry, starting with the hedge funds and derivatives jockeys and extending down to mortgage companies specializing in "liar loans" to get unsold housing stock off the books and disguise the problem of oversupply.

It's the "Shock Doctrine" in action.....

he needs the money for war.