Archive for the 'Foreclosure Help' Category

The Congress is left with merely less than two weeks to decide on whether the second half of the $700 billion bailout fund would be released or not. Supposedly, the fund is to be used to address the persisting foreclosure crisis in the country.

Barney Frank, Chairman of the House Financial Services Committee, is looking forward that by Wednesday or Thursday, his legislation would have been deliberated by Congress. The said legislation is expected to be deliberated by Senate on Thursday.

Based on the bill, transparency and openness is expected to be practiced when administering the funds. Also, a required $50 billion worth of bank rescue funds would be utilized in implementing a program that would help distressed homeowners in mortgage modification in order to prevent foreclosure.

Time is of essence in this concern. Congress is allowed only until January 27 to disapprove the release of funds. Also, if the proposed legislation by Frank is to be attached to the release, it has to be approved on or before the same date. Otherwise, the amount is mandatorily allotted to the Treasury without any provisions.

At this early point, a number of lawmakers have already expressed opposition to the bailout. Some say that the release of funds would lead to a federal deficit while others argue that a bailout would not help in genuinely solving the foreclosure problem and would only make people dependent on the government.

Meanwhile, Barney Frank said that without the funds, foreclosure relief would not be achievable. A substantial part of the $350 billion fund would be used in modifying mortgages to help save homeowners from foreclosure.

A number of Democrats expressed support to the legislation of Frank. They said that if the bill is approved, it will definitely relieve distressed homeowners of the burden of mortgage and ensuing foreclosure. Furthermore, they said that failure to act only worsens the problem.

As President-elect Barack Obama waits for the response of Congress to his request for the release of the remaining $350 billion of the Troubled Asset Relief Program fund approved in 2008, he reaffirmed his election campaign promise of using a big portion of the fund to help homeowners avoid foreclosure and help small business owners save their operations.

The formal request for the funds was sent to Congress after Obama called President George Bush to advise Congress to release the funds. Congress could reject the request within 15 days, but the sitting president could veto the rejection. The veto could only be overturned by a two-thirds vote of both the Senate and House.

Congress has been disappointed with the way the first $350 billion was spent by the Bush administration. Instead of using the funds to acquire mortgage-backed securities and help solve the foreclosure crisis, Bush’s Treasury Secretary Henry Paulson purchased shares of large financial institutions to prop up their capital base. Paulson argued that his action was meant to stabilize the financial sector so that it could continue lending to communities. Most of the recipient banks however have not started lending the money and have not done anything to help solve the foreclosure crisis.

In response to Obama’s request for the TARP funds, House Financial Services Committee Chairman Barney Frank said that the funds could be released under certain conditions. Frank said that one of the conditions would be the use of at least $40 billion to modify mortgage loans and help foreclosure-troubled homeowners.

It is expected that another of the conditions would be the systematic monitoring of recipient banks and organizations on how they are fulfilling one of the original aims of TARP, which is to help avert further foreclosures.

Some Republicans indicated they would oppose the release of the money, but leading Democrats Harry Reid and Nancy Pelosi expressed their willingness to help Obama have access to the funds without delay.

Just minutes after President Bush said at a news conference that President-elect Barack Obama just had to “ask” if he needed the remaining $350 Billion bailout funds allocated for foreclosure prevention, Obama did just that. Now Congress has to vote within a 15-day period whether to approve the request.

However, Democrats are asking for $100 B of the $350 B for a more aggressive foreclosure plan among other stipulations, while Republicans say that the money is not going anywhere.

Rep. Barney Frank, House Financial Services Chairman and Democrat, says that he is negotiating with Obama’s team regarding the changes Democrats want to see before releasing the money. Legislation regarding the matter was set to be brought to the House floor last January 15.

Meanwhile, House Republican leader Rep. John Boehner and Rep. Spencer Bachus, another Republican from the House Financial Services Committee, have already expressed strong opposition to releasing more of the foreclosure aid. In a January 9 interview, Bachus said that the financial situation was no longer shaky and that to release any additional funds would be irresponsible.

To help soothe worries, Obama’s top economic adviser Larry Summers sent a letter to both parties assuring a more controlled use of the remaining $350 billion Troubled Asset Relief Program (TARP). According to Summers, the Treasury Department will be asked to be stricter and more sensible regarding executive compensation. He also assured that more money will go to small businesses and community banks, and that there would be more transparency in the use of the remaining funds. It could be remembered that Treasury Department Secretary Henry Paulson was severely criticized last year for his foreclosure program which used the first $350 billion to inject capital into troubled banks and automakers.

If the legislation that Frank proposed pushes through, lenders will be required to submit a quarterly accounting of the use of the TARP money, while Obama would be required to enact a plan to limit foreclosures of mortgages by April 1.

The year 2008 was full of distressing events for Americans and for most other people in the world. Record numbers of homeowners across the country were forced out into the cold after their homes were put into foreclosure.

Max Rameau, a housing advocate, stated that empty homes are a sign of continuous foreclosure, but a good chance for homeless people.

Many experts believe that the key to solving the deepening economic problem is to stabilize the housing market and finally put an end to increasing foreclosures.
The statement is easier said than done. Whittemore School of Business and Economics Professor Rose Gittell says that the housing crisis has created a vicious cycle that [...]

The U.S. Treasury Department has annoyed Sen. Dodd and Rep. Frank by not cooperating in terms of preventing foreclosures.

Chairwoman Sheila Bair of the Federal Deposit Insurance Corporation (FDIC) has previously proposed a program to reduce foreclosure homes but was met with strong opposition from the same administration that appointed her. Bair’s plan intends to use $24 billion from the Troubled Asset Recovery Program (TARP), the $700 billion bailout package approved by Congress, to encourage lenders to restructure mortgages of homeowners in trouble of losing their homes from foreclosures.

With the rising number of foreclosures hitting the American economy, a nationwide program is underway in an effort to assist these troubled homeowners. However, the plan has received criticisms from various sectors, questioning the need to support these delinquent homeowners while the majority of American families are keeping current with their mortgages.