Bush To Put 30-Day Freeze On Foreclosures

In Effort To Combat Housing Slump, President Offers Relief Program To Qualified Homeowners

(CBS/AP)  The Bush administration, trying to deal with a worsening housing slump, announced a new initiative Tuesday aimed at helping homeowners about to lose their homes. For qualified homeowners, it will put the foreclosure process on hold for 30 days.

Dubbed "Project Lifeline," the new program will be available to people who have taken out all types of mortgages, not just the high-cost subprime loans that have been the focus on previous relief efforts.

The program was put together by six of the nation's largest financial institutions, which service almost 50 percent of the nation's mortgages.

These lenders say they will contact homeowners who are 90 or more days overdue on their monthly mortgage payments. They will be given the opportunity to put the foreclosure process on pause for 30 days while the lenders try to work out a way to make the mortgage more affordable to the homeowner.

"Project Lifeline is a valuable response, literally a lifeline, for people on the brink of the final steps in foreclosure," Housing and Urban Development Secretary Alphonso Jackson, said at a joint news conference with Treasury Secretary Henry Paulson.

He said the goal was to provide a temporary pause in the foreclosure process "long enough to find a way out" by allowing homeowners and lenders to negotiate a more affordable mortgage.

Paulson said that the new effort was just one of a number of approaches the administration was pursuing with the mortgage industry to deal with the country's worst housing slump in more than two decades.

It's really about protecting borrowers, it's about protecting neighborhoods. And it's also about protecting the housing market and the economy, ultimately," Sheila Bair, chairman of the FDIC, told CBS News.

In December, President Bush announced a deal brokered with the mortgage industry that will freeze certain subprime loans, those offered to borrowers with weak credit histories, for five years if the borrowers are unable to afford the higher monthly payments as those mortgages reset after being at lower introductory rates.

"As our economy works through this difficult period, we will look for additional opportunities to try to avoid preventable foreclosures," Paulson said. "However, none of these efforts are a silver bullet that will undo the excesses of the past years, nor are they designed to bail out real estate speculators or those who committed fraud during the mortgage process."

All six lending companies are currently involved in Hope Now, a Bush administration-organized effort to freeze rates on some high-cost subprime mortgages for five years to aid borrowers whose teaser rates are jumping sharply higher. Since then, Paulson has urged lenders to expand that effort to cover struggling homeowners with conventional mortgages.

The Hope Now alliance, which includes lenders, investors and nonprofit groups, said last week that it helped nearly 8 percent of subprime borrowers in the second half of 2007 - more than its original estimate.

The group said it helped 545,000 subprime borrowers with spotty credit in the second half of last year, compared with its January estimate of 370,000. That works out to 7.7 percent of 7.1 million subprime loans outstanding as of September 2007.

[oscarez]

This will not help the price of a house that you paid $250,000.00 for thats only worth $200,000.00 today.

[fstop100]

Just like a finger in the leak in the dam

[creeper00]

"...for qualified homeowners."

Really? Both of them?

[singingrick]

Lenders talk about a %u201Cdebtor%u2019s death spiral.%u201D It occurs when borrowers get so far in over their heads they begin borrowing money just to cover the interest payments on past borrowings. The borrowers have to do this to keep the lending flowing but they can no longer plausibly pay down the principal. As new debt compounds on old, bankruptcy becomes imminent. Further lending is foolhardy. Foreclosure is only a matter of time.

The U.S. is starting to look like it is entering just such a death spiral. It is foretold not simply by the large and growing deficits, nor by the fact that their carrying costs will rise quickly as interest rates rise. Rather, it is the fact that these trends are becoming irreversible, a structural part of the U.S. economy.

[paulboy3]

Too little too late, grasping at straws like a drowning person, give it back to the lender, rent for a while and return to the housing market a year from now, when all the carnige is over

[ktfaith11]

Putting foreclosure on hold for 30 days so the lender and borrower can work out a way to make the mortgage more affordable won''t work unless the lender WANTS it to work. From what I have seen, this entire mess isn''t just a matter of homeowners who can''t pay. It''s also a matter of unscrupulous lenders taking advantage of the situation. I know of someone who made a mortgage payment to Countrywide, one of the lenders on this list. In online searches, I found that Countrywide seems to have a track record of "losing" or not posting payments for a month. Once the person is by their records "30 days past due," they refuse to accept any additional payments, and then begin foreclosure proceedings on the house. I know this sounds hard to believe. I know someone this is happening to, so I searched online and found report after report of this same situation.
Countrywide is in fact being investigated by the attorney general offices of several states. They refuse to return phone calls. They claim not to receive payments or proof of payments. When a company would obviously prefer to foreclose, what good will 30 days do? Where can a consumer caught up in their unethical practices go for help?

[u4y3b9p]

A lot of sub-prime borrowers have been set up for guaranteed failure, simply by the stringent, expensive , and sometimes impossible terms of the loans. Higher interest rates, balloon payments, ARMs. It''s no wonder a lot are defaulting. Many were led astray by promises of refinancing or improved market/rate conditions in the future.

Instead of creating loans that truly help the disadvantaged and ensure a successful business deal for all concerned, the lenders created sub-prime deals that allowed short-term gains for themselves and associated beneficiaries with short-sidedness of the after-affects.

[forthepeopl1]

RIGHT NOW A 250,000 HOME 2YEARS AGO. IS ONLY WORTH 125,000 SO HOW ABOUT THE TOWNS ALSO LOWERING TAXES???
ASSET VALUES....

[inventagod]

So you sign an idiot loan, never read the agreement, blame everyone else for your stupidity - and Dubya bails you out?

Welcome to buSHAMErica....

[dredre2k]

hmmm.... this is a little like putting a bandaid on an axe wound...
Wait until gas goes up this summer...

[killtheliars]

what good will 30 days do? how about not letting lenders make $350,000.00 in interest from a $175,000.00 loan? How about explaining the concept of compounded interest to borrowers?
How about not allowing the mortgage company to make a borrower pay $100.00+ per month for so called mortgage insurance that doesn''t insure anything on behalf of the homeowner, and let the lender pay for thier own insurance?
THese things would help but won''t ever happen. The reason is all of the big money in the U.S. are now into financials.

[antoniof123]

I remember something like this. Oh yes it was called Nixonomics. God what a mess that was price freeze and other such nonsense. This is happening because wages have not kept up and the market is spinning out of control. Now this is not the only problem but one of many you can''t keep borrowing at the rate the US government does (Bush) and get anything less than this.

Too little too late.

[killtheliars]

everyone needs to keep thier chins up. Bush- the all knowing says the economy is just fine! I know I felt much better when I heard that, after all he graduated with a low c average from Yale.

[bobnjersey]

[So you sign an idiot loan, never read the agreement, blame everyone else for your stupidity - and Dubya bails you out?]
[Posted by inventagod at 12:25 PM : Feb 12, 2008]

yes ... it''s a new program known as ''idiots helping idiots''.

[neoconslayer]

u4y3b9p: Government is the referee between business and the consumer.
It has something to do with the fact that greed is inherently bad, that people are inherently greedy, and that people will lie, cheat, and steal to satisfy their greed.
This is why the rightwing hates the government: the government theoretically inhibits the ability of businesses to take advantage of people.
An excellent example can be found in the housing crisis: businesses took advantage of people for profit, while the government was busy trying to keep *** from marrying.
It isn''t so much that some people made bad deals, but it has been reported that banks put people in those deals when they actually qualified for better rates (which were less profitable for the lenders).
Now that the crapola is hitting the fan, the government, that''s you and me, is going to pay.
Maybe some of the companies involved will go belly up, but the people who run them will keep all of their money.

[missingamerica]

Ya think the Republicans have figured out that as they were enabling their constituents to get richer with the tax cuts and the "exporting American jobs is a great idea - we''ll get richer due to lower offshore labor costs, and as a bonus America''s workers will be more obedient ''cuz they''ll be scared to death of losing their jobs" approach they were throwing the baby out with the bath water?

Yet?

[pierson98]

I''ve been pretty worried about what a Clinton or Obama predidency would do to our nation ... but I guess it doesn''t matter. Bush the idiot is enacting socialist policy before either of them get a chance. We now have no major political party that will protect a market economy characterized by free enterprise.

A mortgage is a CONTRACT between two parties. When one party fails to make agreed-upon payment, the other party has the right to re-possess property, in accordance with the terms of the contract. The government has no right or duty to step in and interfere with this contractual exchange.

[rushlimpdrug]

What he should be doing is telling the rest of us where is the best place to pick up one of these good deals for investing.

[pkelly79]

As a person who didn''t jump at all the ''free'' money that was available several years ago, I have my fingers crossed that foreclosures continue to sky rocket. I have my eyes peeled for a bargain! Debt is debt people - you got yourself into it - time to pay the piper. Were some folks victims of predatory lending? Absolutely, they should be systematically identified (which should be easy - just reverse engineer the way they were identified by lenders in the first place) and offered help. True victims should be offered assistance but the rest who took advantage of ARM''s, high LTV''s, or credit card (or other debt) consolidation in a loan so you could continue to spend recklessly should be allowed to learn the all important lesson that nothing in life is free - especially money!

[Michael Arnold]

What? Why not nature take its course and let the market finish falling, because in the end, it will. Another 35-40% at least.

This is all about the banks, NOT the people. I don''t blame these people for bailing, if I were looking at living in a house for the rest of my life thats worth less than the mortgage, I''d bail, too.

[missingamerica]

A mortgage is a CONTRACT between two parties. When one party fails to make agreed-upon payment, the other party has the right to re-possess property, in accordance with the terms of the contract. The government has no right or duty to step in and interfere with this contractual exchange.

Posted by pierson98 at 12:40 PM : Feb 12, 2008

Given the tenor of your statement, I realize that it is pointless arguing things like the ethics and morality of pushing consumers into loans that you know they will be unable to pay "when the balloon goes up".

I will instead suggest that the government should take the same approach that Wal-Mart uses to get land for a new supercenter:

Use eminent domain to sieze all of the houses that are in foreclosure, and just give them to their current mortgagees.

The mortgagees, without the burden of those preposterous ballooned house payments, will spend like mad.

Voila - economy takes off, and the financial industry is shocked into applying a little morality and ethics to their decision process.

That''d tick ya off, wouldn''t it?

[killtheliars]

The thing is if you curb the amount of profit banks and lenders can make you will also cut out a nice chunk of the economy. It is just like the pharmicutical industry, it would help average Americans to be able to buy drugs cheaper from canada, but it would hurt the overall economy because over 16% of our G.D.P. are drugs produced by these companies. It is a catch 22 that was created intentionally

[missingamerica]

The thing is if you curb the amount of profit banks and lenders can make you will also cut out a nice chunk of the economy. It is just like the pharmicutical industry, it would help average Americans to be able to buy drugs cheaper from canada, but it would hurt the overall economy because over 16% of our G.D.P. are drugs produced by these companies. It is a catch 22 that was created intentionally

Posted by killtheliars at 12:46 PM : Feb 12, 2008

Maybe it is "catch 33", the the drug companies are way ahead of you - they are offshoring their work, so any reduction they see in the drugs purchased from them will come primarily out of the pockets of the C-Level execs, their lobbyists, and their major shareholders - i.e., the people that can afford to see it.

See:

http://www.libertypost.org/cgi-bin/readart.cgi?ArtNum=214358

[hypnotoad72]

I''''ve been pretty worried about what a Clinton or Obama predidency would do to our nation ... but I guess it doesn''''t matter. Bush the idiot is enacting socialist policy before either of them get a chance. We now have no major political party that will protect a market economy characterized by free enterprise.

A mortgage is a CONTRACT between two parties. When one party fails to make agreed-upon payment, the other party has the right to re-possess property, in accordance with the terms of the contract. The government has no right or duty to step in and interfere with this contractual exchange.

Posted by pierson98
-----------------------

Who''ll take the loans if they don''t feel confident their job will stay?

And what is "free enterprise" anyway? No spin. Just the base concept.

[mbcsmith]

I HATE THIS WORLD .......


--------------------------------------------------------------------------------

Posted by JLSV1618 at 01:00 PM : Feb 12, 2008

Then please leave it.

[micpowellira]

Attention govt,

Please stay out of the market. Every time I try to take a short position in the stock market, some govt policy messes with my investment.

thanks.

[pierson98]

"Who will take the loans if they don''t feel confident ..."

posted by hypnotoad72
______

WHO FREAKING CARES who takes the loans or doesn''t? Why is that the government''s business? Why is that MY problem? That''s not a rhetorical question - I''m seriously asking you to tell me. Any answer you give will rely upon your idea that it is my job to take care of, and proivde for, other people. Which I do not accept.

And, since you asked, "free enterprise" is a system in which individuals are free to make their own financial decisions, including purchasing, selling, and entering into contracts with others, and therefore free to achieve whatever result they are legally capable of achieving. If they are not ABLE to achieve anything beyond poverty and starvation, I fail to see how it''s my fault or my problem.

I do like your use name. I''ll give you that much.

[actornaught]

Odd question, i guess: Do businesses get tax breaks for leaving commercial properties abandoned and unused? I see some of these places sit fallow for many years. But yet property values have been skyrocketing for decades, probably artificially.

If the ''cons expect people to live on $8/hour, then property values have to plummet, or else eventually only the top 1% will own all of it.

[pierson98]

actornaught - They don''t get tax breaks, but sometimes they leave them abandoned because state and local governments will buy them up if the situation gets bad enough.

Happened in Baltimore a few years ago - a guy owned several apartment and commercial buildings near downtown, and he basically let them rot. Once they became dangerous and ugly enough, the city got a grant (taxpayer-funded, of course) to buy them for (ahem) "re-vitalization" projects. The guy became a millionaire.

He then donated a ton of money to the University of Maryland Medical Center, and he now has a building named after him. Harry Weinberg was his name. You can look it up.

[missingamerica]

"Any answer you give will rely upon your idea that it is my job to take care of, and proivde for, other people. Which I do not accept."

Posted by pierson98 at 01:08 PM : Feb 12, 2008

Why is it our job to ensure that you have police and fire protection, or that you have highways and streets to use in your trips to your bank?

[joyous88]

First the little clown and his criminal conservative allies create this mess with their idiot faux economy;

and now they try to claim credit for saving the economy;

why! it''s just like their war in Iraq.

[joyous88]

easeup;

well done

[pierson98]

I''m not saying it is your job to do any of that. I''d be very happy if roads were private and operated by a toll-system - that way, I''d be paying for what I used. I wouldn''t be taking anything from anyone, and no one would be taking anything from me.

I''ve never called the police or fire department in my life. Private fire departments would suit me fine, in the unlikely event I ever needed one. I would bleed to death before I ever willingly invited the police into my home.

[easeup-2009]

"First the little clown and his criminal conservative allies create this mess with their idiot faux economy;

and now they try to claim credit for saving the economy;

why! it''''s just like their war in Iraq."

Posted by joyous88 at 01:26 PM : Feb 12, 2008

You are a funny little foil-hatter!

[actornaught]

JLSV1618, don''t listen to psychos that lashed out.

do you have anyone to talk to?

[missingamerica]

I''m not saying it is your job to do any of that. I''d be very happy if roads were private and operated by a toll-system - that way, I''d be paying for what I used. I wouldn''''t be taking anything from anyone, and no one would be taking anything from me.

Posted by pierson98 at 01:29 PM : Feb 12, 2008

Ahhh, but to do it right, you would have to pay tolls that reflected the profit that you make from anybody who works for you and uses those roads to get to and from work to make you more money...

[easeup-2009]

This is all about personal responsibility on the part of both the borrowers & lenders. People buying more house than they can afford on gimmicky ARM''s & interst-only loans & banks giving loans to people with questionable credit in order to turn a quick buck.

IMO The morons who signed mortgages without reading them and the banks who knowingly loaned money to deadbeats are getting what they deserve.

[watcher269-2009]

Why not give the people a YEAR before loosing their homes?


OR - and this is a good one - Create more $5.45 and hour jobs to help people save their homes?

Or - and this is a good one - Draft people into the Army that are loosing their homes in order to help them get new homes?


Or - ship them to Mexico or Canada and make it someone else''s problems?

[missingamerica]

IMO The morons who signed mortgages without reading them and the banks who knowingly loaned money to deadbeats are getting what they deserve.

Posted by easeup at 01:34 PM : Feb 12, 2008

"Deadbeats" is beyond an over-simplification; it is an insult.

Before Clinton, the Republicans, and "free trade" most Americans had the expectation that they would be getting pay raises or, failing pay raises, they could get a new job that payed for and thus they could afford an increase in their house payment six or more years down the road.

The free trade and tax policies of the Republicans allowed the corporations and the wealthy elite to invest huge sums of money NOT in America but overseas where the labor rates were lower and environmental regulations were scarce or non-existant.

The right brought this hammer of delayed reaction down on America - and now all of America must pay for their greed.

[pierson98]

If we had toll roads, everyone who uses the roads should pay for them. It doesn''t matter who they work for, if they drive on the roads, they should have to contribute to their construction and up-keep. Rather than being paid for by "the collective" as we do now.

Its the right of a business owner to make profits from his or her business. Yes, that includes the fact that I''m making money off of someone else''s labor, provided they are entering into an agreement to work freely and of their own will.

[watcher269-2009]

Bush/Cheney - WORST PRESIDENT AND VICE PRESIDENT IN UNITED STATES HISTORY!

[pierson98]

Before Clinton, the Republicans, and "free trade" most Americans had the expectation that they would be getting pay raises or, failing pay raises, they could get a new job that payed for and thus they could afford an increase in their house payment six or more years down the road.

The free trade and tax policies of the Republicans allowed the corporations and the wealthy elite to invest huge sums of money NOT in America but overseas where the labor rates were lower and environmental regulations were scarce or non-existant.

Posted by ibsteve2u at 01:37 PM : Feb 12, 2008

----------

Again - why is it the government''s responsibility to make sure that people have high-paying jobs? If someone believed that they would get a huge raise or a better job and didn''t ... that person made an error in judgment. Fail to see how it''s the government''s problem, or mine.

People can invest their money wherever they want to. If they want to invest in overseas companies, that''s their right.

[easeup-2009]

"The free trade and tax policies of the Republicans allowed the corporations and the wealthy elite to invest huge sums of money NOT in America but overseas where the labor rates were lower and environmental regulations were scarce or non-existant.

The right brought this hammer of delayed reaction down on America - and now all of America must pay for their greed."

uhhh...ibsteve....do you have any idea who brought the hammer down on the American worker?

Google "clinton+trade china" oh, and while you''re at it, google "clinton china campaign contribution 1996."

Kinda tells the whole story, doesn''t it?


BTW--Why did labor unions vehemently oppose normalizing trade w/ China? Why did Clinton do it anyway???$$$

[missingamerica]

If we had toll roads, everyone who uses the roads should pay for them. It doesn''t matter who they work for, if they drive on the roads, they should have to contribute to their construction and up-keep. Rather than being paid for by "the collective" as we do now.

Yes, that includes the fact that I''''m making money off of someone else''s labor, provided they are entering into an agreement to work freely and of their own will.

Posted by pierson98 at 01:38 PM : Feb 12, 2008

You are all about everybody paying their share - right up until it comes down to defining what "their share" is.

Not uncommon.

[missingamerica]

People can invest their money wherever they want to. If they want to invest in overseas companies, that''''s their right.

Posted by pierson98 at 01:41 PM : Feb 12, 2008

Riddle me this, then, just as an exercise in seeing how tightly bound your greed makes you:

Why should any American fight for America, when people like you insist that they have no obligation to America?

[pierson98]

Why should any American fight for America, when people like you insist that they have no obligation to America?

Posted by ibsteve2u at 01:47 PM : Feb 12, 2008

--------------------------

I don''t see why any intelligent person would. I think any aggressive war-making is terrible and shameful, and we should have only the military we need to defend ourselves in case of attack.

Don''t get me wrong, kid - I think Bush is a poor President, and his ridiculous oil war is threatening to choke our country to death.

[rowdytexan2]

If we had toll roads, everyone who uses the roads should pay for them. It doesn''''t matter who they work for, if they drive on the roads, they should have to contribute to their construction and up-keep. Rather than being paid for by "the collective" as we do now.


Yes, and if we had toll roads, the the owners can charge us WHATEVER THEY WANT TO TO DRIVE ON THEM to assure that their CEO''S and shareholders make HUGE profits at our expense!!! Great idea there, Fella!

[rowdytexan2]

When we were sold the bill of goods that government should de-regulate, we sold ourselves right out of a voice in our government.

We allowed corporations to operate at FULL PROFIT! That means they have NO investment...that means we have actually bought for them what they own! We''re giving their wealth to them FREE!

Without regulation of corporations for fair profit margins, we are rude, screwed and tatooed!

[missingamerica]

I don''t see why any intelligent person would. I think any aggressive war-making is terrible and shameful, and we should have only the military we need to defend ourselves in case of attack.

Don''t get me wrong, kid - I think Bush is a poor President, and his ridiculous oil war is threatening to choke our country to death.

Posted by pierson98 at 01:50 PM : Feb 12, 2008

This is how the sum of your arguments appear to me:

You would be perfectly happy to be a Lord of the Middle Ages, content to hire your own protection and utilize only those resources you owned within your domain or paying for those resources that lie outside of your domain - while requiring those who worked for you to pay for the use of the infrastructure that makes their survival possible.

In other words, a retreat to the Feudal Ages and civilization be damned.

[pierson98]

This is how the sum of your arguments appear to me:

You would be perfectly happy to be a Lord of the Middle Ages, content to hire your own protection and utilize only those resources you owned within your domain or paying for those resources that lie outside of your domain - while requiring those who worked for you to pay for the use of the infrastructure that makes their survival possible.

In other words, a retreat to the Feudal Ages and civilization be damned.

Posted by ibsteve2u at 01:55 PM : Feb 12, 2008
-----------------------------

Heh. We were rolling along with some sharp-yet-civilized debate until that last one.

I don''t know what to make of your reference to the Middle Ages, other than to say that feudal land-holding systems are essentially the polar opposite of free-market capitalist models.

You can try to make any person who owns or runs a business sound evil by syaing they''re "requiring people to PAY" for goods and services. Do you wag your finger at a store-owner who "requires his customers to PAY" for the food they eat?

I assume you believe in Intelligent Design? Not trying to be insulting, if you have devout beliefs of that nature I can respect them. Just seriously asking.