Did I hear correctly - Bush's plan to help the mortgage crisis?

Question

I just caught the tail end of a CBS Evening News report about George W. Bush's 'plan' to help relieve the mortgage crisis in this country.
If I understood correctly, government-backed refinancing packages would be available, but ONLY to those who own $400,000+ homes - those people with subprime loans and adjustable-rate mortgages wouldn't qualify for assistance.
Bush said something to the effect that we can't bail people out who buy homes they can't afford. Then WHY would we bail out people who buy half-million-dollar homes? It sounds to me like this is just another Bush 'plan' to provide welfare for the wealthy and nothing for those who really need the financial assistance. -RKO- 08/31/07

Answer 1

FHASecure, like all FHA products, will be underwritten to ensure the borrowers have the ability to repay the loan, will require escrow for taxes and insurance, and will continue to offer unprecedented foreclosure prevention assistance. The FHA has never permitted and will not include pre-payment penalties or teaser rates that are common in exotic mortgages and have caused much of the current market troubles.

To qualify for FHASecure, eligible homeowners must meet the following five criteria:

A history of on-time mortgage payments before the borrower's teaser rates expired and loans reset;
Interest rates must have or will reset between June 2005 and December 2009;
Three percent cash or equity in the home;
A sustained history of employment; and
Sufficient income to make the mortgage payment.
"FHASecure is designed for families who are good borrowers but were steered into high-cost loans with teaser rates," said Assistant Secretary for Housing-FHA Commissioner Brian Montgomery. "These homeowners, many of whom are minorities, need a safe, affordable mortgage product that will help build wealth. All FHA borrowers pay mortgage insurance premiums to offset claims to the FHA insurance fund and ultimately prevent risk to the taxpayer."

FHASecure will also bring much-needed liquidity to the mortgage market. FHA anticipates more lenders will offer FHA-insured loans, pool them, and securitize them with the Government National Mortgage Association (Ginnie Mae), which has the full faith and credit of the U.S. government. This guarantee makes Ginnie Mae's mortgage-backed securities the safest on the market and helps to channel greater capital into the housing market, benefiting U.S. homeowners.

Answer 2

Did he go out and write those loans, of course not, did he relax the regulations wellllllll. When he first came in many regulations on business went out the window. The type of mortgage that was written thats caused so many problems were encouraged by a change in the bankruptcy laws that Repubicans hailed. It became less risky for them because they could now collect homes, so they got greedy and wrote mortgages that would have been unthinkable a few years before that. THings like not having to prove income, and allowing teaser rates that would go up astronmically. These are people who paid their $2,000 a month mortgage, we aren't talking welshers here, just people who were told not to worry, they could rewrite the loan. But they can't afford their new mortgages, at $4000, and so the home gets taken, their credit is ruined and we now have whole developments that have homes with weeds instead of lawns. Tighter oversight of the various financial instituions would have been a good move, but thats a bad thing to Republicans. But business is greedy and not anxious to work in the interests of the ordinary person. Bush set the climate, Bush wasn't interested in holding business to ordinary standards, in that sense he is at fault, but the Republican Congress was to blame. Bush wasn't interested in leading in that direction, that was his fault. Lending money for poorer neighborhoods didn't mean that people would be suckered into crazy loans, and it didn't mean a company was mandated to let a nurse and janitor buy a million dollar home. Thats Republican garbage.

Answer 3

Well, the "rich" don't live in 400k homes. That is lower middle class, not "rich". The "rich" still do not qualify for fha

I agree that the government should keep its nose out of private business. But, his plan does seem that it would help people who simply need a little assistance, not bums looking to live off the labors of others.

Answer 4

I saw part of the report. I think we should wait to see what else he says. Its not all sorted out yet. People who own $400,000 homes are not necessarily wealthy. Any shack in NY or LA costs more than that.

Answer 5

Ah i see someone else caught a wiff of what he was shoveling. i thought it was funny i misssed that part just caught the part where he is asking to loosen guidelines so people facing foreclosure with good credit can get refinanced
the only good thing is those who where waiting hopefully are checking there mortgages and refinancing.

I cought a wiff today as well

Answer 6

What's good for business is good for the US, according to the Bush machine.

Answer 7

Nah, you misunderstood, he raised the cap from 375k to 417k so that more people would qualify for FHA.

Answer 8

I don't think the govt should do anything to help...all that's doing is helping the lending institutions who gave the risky loans.

Answer 9

Yeah, but as usual only the rich will benefit.

Answer 10

www.fha-refinance-program.com