Questions and answers about the Hope for Homeowners Act of 2008, passed by Congress last weekend to try to steer as many as 400,000 struggling homeowners away from foreclosure:
Q: What exactly will the legislation do?
A: It will allow those who qualify to cancel their old mortgage loans and replace them with 30-year fixed-rate loans for up to 90 percent of the home's current value. The FHA will insure a total of $300 billion of the loans over a three-year period.
But the decision on whether to write such a loan remains up to banks, which would have to be willing to take a loss on the existing loans in exchange for avoiding an often-costly foreclosure.
Q: Who is eligible?
A: Eligible borrowers must have spent more than 31 percent of their monthly incomes on their mortgages as of March 1, 2008. The troubled loan must have originated no later than Jan. 1, 2008, and be on the borrower's primary residence. And the borrower's income must be verified.
Q: When does the program start?
A: It takes effect Oct. 1 and runs through September 2011, although the FHA isn't likely to have it operating at full capacity until next year.
http://news.yahoo.com/s/ap/20080730/ap_on_bi_ge/mortgage_relief_q_a;_ylt...
This is welfare, a political ploy, a dumping of bad mortgages upon the taxpayers, and is morally wrong.
All of this bailout bullshit will vanish once January 20th rolls around. You can't pay for a trillion-dollar war on top of a trillion-dollar bank collapse.
on this one!
"America is finished. We are going to destroy this country. Our economy is just going to unravel," he told me yesterday. "The question is how much money is the world going to lose before it writes us off?"
"The government doesn't have the balls to raise taxes. It's going to print the money. It's going to destroy the currency," he says.
Article here.
The government has already destroyed the currency. When Nixon changed the backing of paper money from silver to the "productivity" of the American worker in 1972, he in effect debased the dollar. The mint also stopped using silver in our coins and substituted zinc-sandwiched coinage. It has taken just thirty-some years for everybody to figure out that our money is becoming worth less and becoming more WORTHLESS every day. We'll start looking like Zimbabwe pretty soon.
"This week saw the introduction of a so-called "bearer cheque" worth 50,000 Zimbabwean dollars - 50 times the highest available banknote - but actually worth around half a US dollar and only enough to buy a loaf of bread."
http://news.bbc.co.uk/2/hi/africa/4665854.stm
With the changes in the banking system at the behest of lobbyists and bankers wanted to make more profit and Wall Street.
When the rules were changed to allow other institutions to invest in the mortgage market the instability started and now we have banks collapsing as a result.
But all is not lost just yet, at least not as a result of this program. I have serious doubts as to how many will actually qualify. First, it does nothing for those who have already lost their homes. Second, you have to qualify by FHA credit standards, though I am guessing they could be somewhat relaxed for the program. They don't give loans to just anyone. If you are having serious trouble with your house payment chances are strong the rest of your credit is trashed too so it probably eliminates many from qualifying. A borrower that will benefit from this is probably not in serious trouble yet.
As with any government program, I can think of a scenario or two in which a homeowner that is in no danger of foreclosure can use this program to take advantage of government's generosity with our tax dollars to reduce his/her payment and debt outstanding.