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NEW -> Contingent Buyer Assistance Program
[quote author="skek" date=1216965091]John McCain writes an <a href="http://www.tampabay.com/opinion/editorials/article735638.ece">op-ed</a> on the housing bailout bill. He doesn't like it.



<blockquote>Americans should be outraged at the latest sweetheart deal in Washington. Congress will put U.S. taxpayers on the hook for potentially hundreds of billions of dollars to bail out Fannie Mae and Freddie Mac. It's a tribute to what these two institutions ? which most Americans have never heard of ? have bought with more than $170-million worth of lobbyists in the past decade.</blockquote>


McCain's opposition to the bill seems based, in large part, on the fact that he views Fannie and Freddie as political, corrupt and unnecessary. He may be right and McCain has always been more of a reformer than a policy wonk. Yet, I would have like to see him get into the economics of why the bailout is bad policy, something that would please the economic conservatives in his base (not to mention many on IHB).</blockquote>


Yeah, but he shoots himself in the foot with a whole bunch of sheeple.



Obama's next move when he gets into country is to go to guns and paint McCain as out of touch and an elitist becuause he doesn't feel peoples pain like these fine upstanding folks:



<a href="http://mortgage.freedomblogging.com/2008/07/22/countrywide-lets-fullerton-couple-keep-home/#comments">http://mortgage.freedomblogging.com/2008/07/22/countrywide-lets-fullerton-couple-keep-home/#comments</a>
 
Fitch Updates Ratings Model; Projects Steep Housing Price Declines



http://www.housingwire.com/2008/07/24/fitch-updates-ratings-model-projects-steep-price-declines/



Fitch will also roll out new 25 MSA-level risk factors influencing frequency of foreclosure and loss severity estimates, the agency said; the 25 MSAs chosen are those that have exhibited strong non-conforming mortgage lending activity in the past.



?Some MSAs such as San Diego and San Francisco, CA are expected to experience home price declines by as much as 47 percent and 33 percent over the next five years,
 
Refi eligibility details here



Housing Bill Has Something for Nearly Everyone

http://www.nytimes.com/2008/07/25/business/25money.html?pagewanted=1&_r=1&hp;
 
This story is so, so sad.



<a href="http://www.ajc.com/news/content/news/stories/2008/07/23/home_foreclosure_suicide.html">Mass. woman kills herself before home foreclosure</a>



As sad as it is, I'm a little surprised we don't hear more stories like this. At the same time, it's just <em>a house,</em> so hopefully more people are keeping their perspective.
 
The must read for today piece over at the Big Picture: <a href="http://bigpicture.typepad.com/comments/2008/07/appraisers-wows.html">My Experience at Indy Mac: Fraud, Corruption, Criminality</a>



<em>My quick overview of the conflicts, fraud, and criminality at Indy Mac --



Fraud:



? Underwriting loans based on appraised values well above purchase prices;



? Fabricating rent rolls for commercial properties to be appraised;



? Over-stating Construction work as 80% complete versus 15% in actuality;



? Attempting to change discounted cash flow models for subdivisions in order to increase appraised value;



Criminality:



? Attempted intimidation of Appraisers;



? Providing false information to appraisers;



Conflict of interests:



? Appraising a development where the land was being purchasing from David Loeb, IndyMac?s Chairman of the Board;



? On one transaction, the CEO's father and father-in-law were commercial construction inspectors for the firm; the loan officer was the CEO's brother (a former police officer with no loan experience);



That's just the overview. </em>
 
Muzie--some of that stuffis not a bad idea.



Some of it will not actually happen for a long, long time,

if ever. For example---



Frankly a 10% haircut is not a bad idea--except

apparently it is not mandatory. Banks fought like tigers

to avoid cramdown legislation, and this would be a kinder,

gentler form of cramdown legislation.



Plus, I don't see this appreciation thing as a sop to 2nd

lienors doing anything. I think 2nd lienholders understand

now they are screwed, and there isn't gonna be any price

appreciation for so many years they will be long out of

business before it happens. Hence, no still no motive to

cooperate.



They can raise loan limits all they want, with realistic

underwriting hardly anybody will qualify for these higher limits.



Here in Florida there are hardly any regular institutional

mortgage being given out. The only action is with hard

equity lenders who are giving loans at 10-18%, and 4-10

points. This is, I think accurate pricing of the risk of loans,

and why under 7% loans are largely illusory. We are in such

a mess not that this stuff is way to little way to late.



This actually isn't a bail out tho I grant you it looks like one.

It is an illusion that will help some few people, but the rest

are screwed.



What will happen, is within the next year or 2 FDIC will fail,

or we will have a monumental inflation, which is a kinder,

gentler form of default of the US government. Given those

2 choices, I'll take inflation.



No comments on the gubernator and the minimum wage?



Have a missed a thread?
 
Ahhhnold's stupid idea isn't going anywhere, the comptroller has said that he cannot comply. and since he writes the checks, it ain't gonna happen.



plus, i have been trying to figure out how they could apply it to non-hourly workers. sure, there are lots of low level hourly workers, but there are lots (though numerically fewer) of salaried workers who probably in toto cost more per month.



plus, how many prison guards are going to show up if they aren't getting paid?
 
The 700 page housing bill passed. Spirited discussion on CR.



It includes a tax break for Chrysler!! And something to do with

canadian rail cars.!!



And probably my kitchen sink.



This is a new low for Congress My opinion of congress might just

sink below my opinion of Bush. Hard to believe possible, but there

it is.
 
Speaking of CR, he has been posting some great comics of the local artist Eric Lewis. <a href="http://calculatedrisk.blogspot.com/2008/07/why-fdic-fears-bloggers.html">Here is his hit tip to Tanta and CR</a>...



http://bp1.blogger.com/_pMscxxELHEg/SIrPrKrVtLI/AAAAAAAACSk/zhj9ehtNcCs/s400/EricCartoon.jpg



Also, <a href="http://www.house.gov/apps/list/press/financialsvcs_dem/hr3221_bill_text.pdf">here is the PDF link to all 694 pages of the house bill</a> (which I saved the PDF in case the link disappears). I haven't read it yet, but from the highlights of CR, and others, I can't see this doing much more than helping the few that deserve it, and many that don't.



And an aside... With Dodd coming out in saying that foreclosures should be frozen until this bill takes affect... it makes me embarrassed that he is on the banking and finance committee, when he has no f@#king clue about loan servicing. Does he want to crush another sector of an already troubled economic sector? Yeah... just let the already strapped loan servicers advance money they don't have to their investors. Republican or Democrat, this is the most shoot yourself in the foot asinine idea he has had yet, and you should be appalled at his stupidity regardless of your political party. I dunno who I want to kick in the nuts more... him or Chrissy Street. I think I need Harvey Dent's lucky coin and I just keep picking heads.
 
Covered bonds, Department of the Treasury capitalizing Fannie and Freddie, the Federal Reserve taking a $30 billion dollar hit for JPM to buy Bear Stearns, the housing bill, IndyMac, BOA takeover of Countrywide, the opening of various "temporary" security auction facilities by the Fed, etc.








Is anybody starting to discern the desperation?
 
The PPT should just pay off a few celebrities to do crazy things to make the headlines and take people's attention away from all that. When Britney Spears is on the Fed's payroll .. then we'll know that things are getting deperate :)
 
<strong>Merrill: No longer in denial</strong>



<blockquote>When Merrill Lynch (MER, Fortune 500) on Monday sold a $30.6 billion portfolio of risky mortgage debt for 22 cents on the dollar, it took a big - though by no means final - step toward providing the sort of transparency that will have to sweep through the financial sector before any sustained rebound can take place.</blockquote>


<a href="http://money.cnn.com/2008/07/29/news/newsmakers/thain.denial.fortune/index.htm?postversion=2008072915">http://money.cnn.com/2008/07/29/news/newsmakers/thain.denial.fortune/index.htm?postversion=2008072915</a>



Read the whole story. Even though Merrill sold the debt for 22 cents on the dollar, the article goes on to explain that they may still be on the hook for more losses because Merrill had to loan the purchaser 75% of the purchase price.
 
<a href="http://online.wsj.com/article/SB121727861946290899.html?mod=Economy">Amid Housing Slump, Glut Eases Slightly</a>



<em>Rising Foreclosures, Tighter Credit Still Pushing Down Prices; Economists Don't Expect Big Boost From Congressional Package.</em>



<a href="http://online.wsj.com/public/resources/documents/retro-HAGERTY.html">Check out the interactive chart to see the numbers for OC</a>.
 
Pardon me for asking these questions, as I don't have the time to search for the answers, and I was hoping someone might know the answer..



With the new housing bill that is passing, is there any provision that people must pay off their HELOCs before qualifying for this assistance?
 
[quote author="Thankful_Renter" date=1217387519]<strong>Merrill: No longer in denial</strong>



<blockquote>When Merrill Lynch (MER, Fortune 500) on Monday sold a $30.6 billion portfolio of risky mortgage debt for 22 cents on the dollar, it took a big - though by no means final - step toward providing the sort of transparency that will have to sweep through the financial sector before any sustained rebound can take place.</blockquote>


<a href="http://money.cnn.com/2008/07/29/news/newsmakers/thain.denial.fortune/index.htm?postversion=2008072915">http://money.cnn.com/2008/07/29/news/newsmakers/thain.denial.fortune/index.htm?postversion=2008072915</a>



Read the whole story. Even though Merrill sold the debt for 22 cents on the dollar, the article goes on to explain that they may still be on the hook for more losses because Merrill had to loan the purchaser 75% of the purchase price.</blockquote>


And the only paper they "sold", (choke-choke-choke), is what they refer to as Super Senior paper. If they are only getting a loaned $0.22 on the dollar for super senior notes, just what do you think they can get for their not so super senior paper, and where do you think they are keeping it? In Level 3 assests! So they do not to mark to market! Transparent, my a__ !!!
 
[quote author="JoonB" date=1217463424]Pardon me for asking these questions, as I don't have the time to search for the answers, and I was hoping someone might know the answer..



With the new housing bill that is passing, is there any provision that people must pay off their HELOCs before qualifying for this assistance?</blockquote>


There is <strong>NOT</strong> a provision that people must pay off their HELOCs, but there is a provision that the second lien holder may gain access to some supposed future apreciation if they write off their lien. And I would assume that HELOCs are included as second lien holders.
 
The high end has stopped it's rebound. <a href="http://lansner.freedomblogging.com/2008/07/30/oc-upper-end-sellers-cut-prices-back-to-january-level/">Lansner Asking Prices Chart 75th and 25th percentiles</a>

<img src="http://lansner.freedomblogging.com/files/2008/07/blog-ht-708.png" alt="" />

Apparently the bottom isn't in.
 
A New Housing Bill was Signed by President this morning

?Housing and Economic Recovery Act of 2008?



Provisions relevant to OC renters and homeowners are summarized below:



(1) An estimated 400,000 homeowners facing foreclosure, many of whom reside in California, can refinance their current mortgages with a Federal Housing Administration (FHA)-backed loan. To qualify, homeowners would have to be paying more than 31 percent of their incomes toward their mortgages and show they could afford to make the payments on a new, smaller loan.



(Comment: maximum debt to income ratio can go up to 50% with compensating factors, if approved by automtic underwriting machine; On the other hand, a lot of troubled homeowners will not qualify if they don?t know what to prepare now).



(2) Conforming Loan Limit permanently increases to $625,500 in high-cost areas, the government-sponsored mortgage companies Fannie Mae and Freddie Mac can buy and that the FHA can insure. The new loan limits for Fannie Mae and Freddie Mac are the greater of either $417,000 or 115 percent of an area?s median home price, up to $625,500. The new FHA loan limit will be the greater of $271,050 or 115 percent of an area?s median home price, up to $625,500. Both new loan limits will be effective at the expiration of the economic stimulus limits on December 31, 2008.



(Comment: many Californian will be able to refinance their mortgage to more affordbale ones, and first time buyers can enter the market more easily.)



(3) First-time home buyer tax credit up to $7,500, which allows first-time home buyers to receive a tax refund worth up to 10 percent of a home?s purchase price, up to a maximum of $7,500. The refund serves as an interest-free loan and the homeowner is required to repay it in equal installments over 15 years.



(Comment: The clock is ticking. To receive $7500, buyers must buy a house by July 2009.)
 
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