Don’t spend that $26 dollars all in one place!
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Government announces new program to help ‘underwater’ homeowners
The federal government on Monday announced new rules that would allow many more struggling borrowers to refinance their mortgages at today’s ultra-low rates, reducing monthly payments for some homeowners and potentially providing a modest boost to the economy.
The Federal Housing Finance Agency, working with the Obama administration, said that up to 1 million “underwater” borrowers might benefit from an expanded program that targets homeowners who owe more than their properties are worth.
But the program might not have a major impact on the economy. There are about 11 million underwater borrowers in the country. And under an illustrative example provided by FHFA, borrowers might reduce their payments by just $26 per month…
DETAILS ON THE CAMPAIGN
Only loans that are guaranteed by Fannie Mae and Freddie Mac will be eligible. Borrowers must check with their lender or Fannie or Freddie to see whether they are eligible. Borrowers also must be current on their mortgage and not have made a late payment in the past 12 months.
To avoid all fees, borrowers, many of whom have 30-year mortgages, will have to take out a new mortgage of 20 years or less. That will mean that homeowners have fewer years to pay off their total balance, largely offsetting whatever they might be saving by taking advantage of today’s low mortgage rates. The plus side is that borrowers will pay off their mortgages more quickly.
On the other hand, if borrowers pay fees, they will be able to get a 30-year mortgage at the new low rates. That could potentially lead to $200 in savings per month.
Check out the rest from the Washington Post here…
For an even more in depth analyses we go to David Dayen…
So, earlier, I said “what’s not to like.” Here’s what’s not to like. The “reps and warranties” part of this. When you refinance a loan, you’re essentially creating a new mortgage, unlike a loan modification, where you modify the old mortgage. Under the plan, the FHFA will eliminate their ability to force repurchases on these old loans, and they would lower their ability to force repurchases on the new loans created. There will be a “modest fee” associated with relieving these reps and warranties, according to Donovan, which won’t be set until November 15. They will be lower than the current risk-based fees that Fannie and Freddie charge.
What does this mean? A “reps and warranties” case is a case where the loan was originated improperly. When Fannie and Freddie get sold a bad loan like this, they have the right to force it back on the originator. New lenders are reluctant to refinance such loans, because they become liable for the put-back.
What this means is that FHFA will essentially settle on all the loans that get refinanced for a “modest fee,” which we can safely assume will be next to nothing. And we know that a substantial amount of loans, perhaps a majority, were illegally originated during the bubble years. You’re letting the lenders who originated the loans off the hook for that, in exchange for allowing more refis.
Banks will flock to this, because it essentially substitutes bad paper for good. Gene Sperling specifically cited this reps and warranties issue as the major barrier for refis. “We feel that removing the reps and warranties barrier has the potential to unleash competition for housing finance for loans backed by the GSEs,” Sperling said. “Those who are not the original mortgage holder will sit on the sidelines as long as the potential exists for a mortgage that was not originated perfectly to be put back on them.” What he means is that the legal liability for taking on these loans will be removed.
There’s more to this. FHFA is currently in the middle of suing 17 banks over, among other things, reps and warranties. This initiative damages that lawsuit, as I said back in September, because it takes away some of the source material for it. The lawsuit would involve fewer loans, then, and it may tip the balance and hurt FHFA’s ability to proceed with the suit at all.
I’m trying to get a few more answers on this, but the danger is obvious. Banks broke the law and this program helps them get away with it. The fact that Donovan mentioned in passing that this kind of program could be extended to bank-owned loans through the state AG settlement just shows you where this is all headed.
A mass refi plan like this may be worthwhile as stimulus, but as far as the rule of law is concerned it pretty much stinks.
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I have been waiting to see what kind of legal plan the government would come up with to trick folks into creating a new loan packet for them–and here it is.
HARP is absolutely a bank bailout–dressed up like a consumer relief program. The carrot is so small you need a magnifying glass to find it and the details make it easy to see that the only party who really benefits is the bank.
I am not personally fighting a foreclosure–I have owned five homes in the past but have chosen to rent for the past 11 years–specifically because of my understandng of this mess as far back as 2000.
I encourage anyone who has a mortgage to be exceedingly careful in analyzing your options BEFORE considering turning a non-collectable, invalid mortgae which:
a. has already been paid off (not by you but by insurance and multiple sales to other investors so there is NO
outstanding balance)
b. no EXISTING note which identitifies a lender who is owed
c. no EXISTING note which has attahed to the mortgage
d. no RECORDED record of assignments so there can be a clearly established chain of title to verify ownership
It may not feel like you are in a good place but in fact you are in a great position torefuse to pay. The banks know it, the politicians know.
YOU MUST UNDERSTAND that and not make a decision which plays into their hands by creating a new, geniune debt when you don’t have one at this minute.
NO you did not pay for your home, but it is nonetheless PAID OFF. If you continue to stand your ground you will win.
1. They (none of the banks) do not have STANDING to foreclose on mortgages which have been inserted into
the MERS system during the past 15 years
2. They (none of them) bothered to keep hard copies of the NOTE on all of the mortgages which were made
during that timeframe. They felt confident that their MERS system eliminated the need to do so and they
were too greedy to pay for the support staff to file and store them. So they destroyed them. They do NOT
exist– anywhere.
Pay your utilities and insurance and taxes, home owners association dues.
STAY put. Do NOT abandon–even if they somehow complete the foreclosure process STAY and make them try
to evict you–IF you can stand that emotionally. You still have a chance at keeping your home if you are IN
IT because you will eventually learn what they did wqrong –OR DON”T HAVE to allow you to win.
Learn all you can about the foreclsoure process in your state .
File a QWR and request documentation of the lender who owns your NOTE now; a record of the entire chain of
title, complete with all assignments fromt he day of closing and other pertinent documents. You also want
a complete hisotry of the disbursement of all payments you have made as well as documentation of any
insurance payments which are associated with your loan/mortgage/note. These are the MINIMAL things
you should ask for.
Keep fighting by responding to any legal action the bank tries to take against you.Show up at the hearing, go pro se if you have to. they win automatically if you don’t.
Please keep fighting. You already won–you just have to walk through the battle.
God’s belssings!
This looks to me like another back door bank bailout.
Fannie/Freddie have been pretty aggressive at using ‘put-back’ to force banks to buy back loans which fail and which can be shown to have been made with some element of fraud. Basically, every loan made from about 2004 forward. Putting back loans has saved the taxpayers tens of billions and has cost banksters who sold those loans to Fannie/Freddie the same.
Now, if Fannie/Freddie make a new loan to homeowners who later default and whose original mortgage was fraudulently made, there is no recourse. It’s now the government’s loan, on the taxpayer’s dime and the banks are off the hook.
In addition, they have once again avoided the one thing that would really heal and clear the housing market – cramdown.
Why would the politicians do the honest thing?…they would rather deceive as many as they can and then allow their criminal friends and cohorts to steal what they have no legal right to take with ease…This is precisely what ongoing Criminal Enterprises do..and the U.S. GOVERNMENT IS AIDING AND ABETTING THEM…. There is a FEDERAL LAW KNOWN AS THE RICO ACT that fits all of their descriptions…Law enforcement should have prosecuted them by now…But, someone is blocking criminal prosecutions and Obama would not help out homeowners with Bankruptcy, even though these are UNSECURED DEBTS… IN MY OPINION, THIS SOUNDS LIKE THERE MIGHT BE SOME MASSIVE CORRUPTION AND TREACHERY…BY SOME REAL TRAITORS FROM WITHIN…
OMG…!! Is this like OBAMA PLAN II for the next unsuspecting bunch of homeowners? A NATIONWIDE MORTGAGE REVOLT is in order….NATIONWIDE PROPERTY TAX REVOLT UNTIL THE U.S. GOVERNMENT STOPS AIDING AND ABETTING AND ALLOWING THE FEDERAL GOVERNMENT TO ROB THE AMERICAN PEOPLE FOR WALL STREETS MASSIVE COLLATERAL DEBT FRAUD.. !! WALL STREET HAS CREATED MASSIVE UNSUSTAINABLE DEBT FOR THEMSELVES VIA MASSIVE CRIMINAL FRAUD…!
….and all they are doing is herding us like SHEEP TO THE SLAUGHTER!
Yes they are doing that to millions by instilling fear..!! They have done that our entire lives in order to steal what they have no legal right to take…My friend said she would not even fight to save her home from fraudclosure…if they want to take it they will take it no matter what she does…She is an ex-bank employee…she is brainwashed and so are millions…that is the problem…my own sister is brainwashed even though she is fighting a CHASE eviction and was illegally foreclosed on…She says someone is owed this money….!!! Yeah, she is…! People are too frightened to think outside of the box..The U.S. GOVERNMENT should sue all of the bastards on behalf of the American people..via a Nationwide law suit against the WORLD BANK…!
……too frightened or just too damn ignorant!
Rob, probably both…too many people still haven’t woke up yet…The History Channel had a show on about the Nazi’s…the Nazi’s blamed the Jews for their own murders…and said they all died because they were cowards….That is a lie…they SNUCK IT IN UNDER THEIR RADAR…AND THAT IS PRECISELY WHAT THEY ARE TRYING TO DO IN AMERICA AND AROUND THE WORLD…One million dead Iraqi’s and how many dead and maimed Americans to kill one tyrant..???? Who had nothing to do with 9/11 at all..POPULATION CONTROL BY..MASS DECEPTION…!! THAT IS WHAT THEY DO…
….noy trying. Vent….they have already done it….the war is at our doorstep….it’s inevitable…..and most are still asleep! George H.W. Bush was a known nazi…..proven by pictures of him in 1938 Germany with Prescott Bush, Martin Borman and “The Angel Of Death” Josef Mengele! Take a look at our last two non-standing Presidents….and you have to say: we have already been infiltrated and out once great country is being strangled to the death! Obama is a puppet…..completely neutralized….and doing their bidding….simply by doing nothing and allowing this evil scheme to sustain……
Rob, I meant they are trying to sneak in TOTALITARIANISM….first comes SOCIALISM…., VIA TAXATION, then THEY CONTROL ALL OF OUR WEALTH AND THE DISTRIBUTION OF OUR WEALTH..WHICH CREATES FASCISM…THEN COMMUNISM, then TOTALITARIANISM…I have been saying for a while the NWO has hijacked America via the traitor politicians…They are aiding and abbetting the NWO stealing America under the guise of debt….which is not our debt it is WALL STREETS DEBT…ALL WELL DEVISED UNDER ORDERS BY THE NWO..THE NAZIS…THE FOURTH REICH…
You are do RIGHT ON! They are luring unsuspecting homeowners into signing their deeds or trust (rightfully owned by their fruad) in another scheme to make it look like they are helping in the smallest way possible. Wow $26.00 a month savings. What a bunch of CRAP! Warn everyone.!
Opps SO not do!
It is your signature on a new contract…that they want….clean up that title! I will not play ball with them!
No one should negotiate with these financial terrorists…People should know before they try to refry themselves…Geithner is predicting economic conditions to be alot worse by Fall of 2012…They are being set up to fail….and lose their homes with an all new note and mortgage….They are calling it HARP now…instead of HAMP…A more perfected, deceptive beast…this time there will no doubt be a stipulation that you can’t sue them for any previous frauds….These are perilous times..!.
They want to keep the Ponzi going with refis and then steal the homes later when the UNSUSTAINABLE DEBT WALL STREET CREATED FOR THEMSELVES….BLOW UP…AND IT WILL BLOW UP….DON’T DO BUSINESS WITH THE BIG BANKS …!!!! THEY NEED TO SHUT DOWN….and put into receivership…all the money collected goes back to the U.S. TAXPAYERS..!!
Sorry, Rob, but I don’t think you have the option of playing ball with them if you’ve missed a payment.
Caitlin O..Stop the treachery!…they owe us now..they committed massive fraud in our names..
Shelly….Their tricks and games are getting a bit outrageous and insulting to say the least….it seems they are running out of ideas….throw the dog a bone of $26.00….they have robbed trillions of dollars from the people and they think $26.00 is a savings ? Nobody should sign ANYTHING…NOTHING….it is a scam…they want your signature to void all the frauds …it is another set-up….don’t step into another trap….and to think they had the nerve to even suggest it….If you read it…it,,, MIGHT… benefit some homeowners….the key word….MIGHT ….IT DIDN’T SAY IT WOULD…..in order to apply for this $26.00 savings you will sign the NEW SET of papers to start to see if you can be helped….they now have your signature and the results will be you don’t qualify…..you are denied. There you have waived away your rights to sue the banks for any fraud…. DON’T BE A SUCKER……remember…they have robbed the people of trillions of our tax dollars and still want more. This in no way would boost the economy…what WILL boost the economy would be for the banks and Wall Street to give back the trillions they stoled and to pay their own debts to boot. …..you play…you pay………………
I vent..That is what I said in my comment to Shelly….it is your signature they want…and you will waive your rights to sue the bank for fraud…than you will be denied at the end…it is nothing but put under a different name..from HAMP TO HARP…..IT STILL SPELLS TRAP. WHAT AN INSULT..$26.00 after they have robbed the people of trillions. …I am not sure if I am going to vomit or spit flames of fire……….
Does ANYBODY know what they are doing in Washington? Are they really that far removed from reality?
This is a Hitler Plan Mary…they are “all in” on it in Washington.They areTRAITORS to their country….Time to tell all of the politicians….they broke the social contract…they are fired..!! It is about time the people stop paying and cooperating with this debt tyranny…period!
This is such absolute bullsh#$ I think they’re should be an attempt to occupy the FHFA. DeMarco is a twisted old bureaucrat and Obama is the absolute worst Prez in US History. CROOKS!
Here Here:)
Obama really must be the dumbest fucker on the planet……
Java …. don’t be fooled …. he is not dumb …. he is playing the game …. IT IS ALL OF THEM … both parties and they are playing us. When you concentrate on one party the other ones creep in and between the two … You lose.
….he is not dumb…….remember JFK?……..they can assassinate him too…..and he knows it…….
That is why maybe they should all just quit lying and covering up…..We all have to make a stand, even the traitors…!
Veny…….they all have to follow the plans of the NWO……..or they will end up dead……..or being moved out of their penthouse into the outhouse….down here with us…….WTF!
Rob, If everyone would just stop paying…and using their banks…their credit and debit..People do not realize they are feeding the beast..the very tyranny that is out to destroy our National Sovereignty and create a one world dictatorship…Did you hear about the nurses who got arrested last nite at Occupy Chicago?? There is going to be a protest today outside of City Hall by the Nurses union and others because of the police abuse of power…They went to the right place to do that protest..! Calling out the Mayor is the right thing to do…! That is who I blame..
You can stop supporting the banks by not paying your debt, but you will spend an inordinate amount of your life trying to defend your wages from garnishment and trying to defend yourself in court. Sounds kind of like the fifth circle of hell to me.
ORRRR .. .. .. you can dropkick the banking pricks to the curb by paying off what you owe and never ever ever in your life taking on another dime of debt. Debt Free. Forever. Off the hamster wheel. Forever. Break the chains of debt slavery. Forever.
Why do so few people seem to choose this route?
I vent….That is the silence I talk about……Count how many are in Washington and not one has spoken a word….they know what would happen to them……but than again .they will have to face the outside world some day……….
Not so! He is a smidgen more clever than the dumbest – who are the ones who will fall for this “plan”. He’s counting on it…
Hell no to a government program that ‘papers over’ the bad paper with good at TAX PAYER expense (the FHFA-give-away).
Or the FHFA is helping their owners STEAL WHAT THEY DO NOT OWN….. they are ONLY INVESTORS IN THEIR OWN DEBT THEY TOLD THEIR FINANCIAL INSTITUTIONS TO CREATE….. They are outright stealing, homes and businesses they have no legal right to take……the Federal Government is who is stealing for Rome under the guise of we owe too much debt, when it is their perps on Wall Street who owe that debt AND THEY INVESTED IN THAT VERY DEBT……. and the U.S. GOVERNMENT is aiding and abetting them…They have hijacked the U.S. GOVERNMENT via the politicians, who are traitors and treasonists from within…They are all fired…!