Homeowner Rescue Plan Passed By House

Bush Threatens To Veto The $300 B Plan That Would Provide Cheaper Mortgages To Americans Facing Foreclosure

(AP)  The House on Thursday passed a massive homeowner rescue plan to provide cheaper, government-backed mortgages to half a million debt-ridden borrowers and bolster an economy crippled by the housing crisis.

Defying veto threats from President Bush, the House approved the measure by a vote of 266-154, with 39 Republicans - mostly from areas suffering worst from housing woes - supporting it.

It would let the Federal Housing Administration take on up to $300 billion in new mortgages so that financially strapped borrowers facing foreclosure could refinance.

The plan by Rep. Barney Frank, D-Mass., is the centerpiece of a broader package of bills approved Thursday that Democrats say will prevent more foreclosures and help homeowners and communities deal with the fallout from the mortgage meltdown.

"We are in a recession, and the major cause of that is the subprime crisis," said Frank, the House Financial Services Committee chairman. "Diminishing the number of foreclosures is in the interest not simply of those who will avoid foreclosure, but people in their neighborhood, (in) the cities in which they are located, and the whole economy."

The measure is targeted at homeowners facing default, including many who owe more than their houses are worth.

For instance, a homeowner who owes $290,000 on a house now worth $225,000 could refinance into an FHA-backed loan if the mortgage holder was willing to take a loss of about 36 percent. The borrower's monthly mortgage payments would fall from $2,200 to about $1,200.

Loan holders would have an incentive to participate, proponents believe, since the alternative would be costly foreclosures, which can involve losses of 50 percent or more.

Supporters hope the package - which awaits action in the Senate - will serve as the basis for a broad bipartisan housing compromise that could satisfy both parties' keen appetite for delivering election-year aid to anxious constituents.


But Bush's veto warnings, bolstered by staunch GOP opposition, are clouding its prospects.

"House Democrats passed bills that they know will never become law. Most Americans understand that we shouldn't create a taxpayer-funded bailout for lenders and speculators," said Tony Fratto, a White House spokesman.

Republicans argued the package reward lenders and irresponsible borrowers at the expense of homeowners and renters who made more prudent choices and are straining to cover their costs in a punishing economic climate.

"The vast majority of Americans who find themselves struggling with mortgage payments, struggling with high gas prices, struggling with high food crises are now going to assume responsibility for ill-advised financial decisions and misjudgments of other people," said Rep. Spencer Bachus, R-Ala.

Under Frank's plan, homeowners currently considered too risky to qualify could refinance into FHA-backed loans if their lenders agreed to take substantial losses on the original mortgages. Borrowers would have to show they could afford to make payments on the new loans. They would have to share with FHA at least half of their proceeds if they profited from selling or refinancing again.

The plan is projected to cost $2.7 billion over the next five years.

Republican backers said they were putting aside their philosophical objections to a government-based rescue due to the severity of the housing crisis that has hit their constituents.

"There are 500,000 real families with children out there who are going to be helped by this," said Ric Keller, R-Fla. "It may not be a perfect bill, but good people in my home state of Florida need help, and in my view, this is the only train leaving the station."

Indeed, with a legislative schedule squeezed by the November elections, Congress has just a couple of months to come to terms with the White House on a housing package. Sen. Christopher J. Dodd, D-Conn., the Banking Committee chairman, has been searching for an elusive bipartisan deal on a similar measure, which he hopes his panel can vote on next week.

The House on Thursday also passed, 239-188 a bill to send $15 billion to states to buy and fix up foreclosed property. Bush has also threatened to veto that measure, contending it rewards the very lenders who helped caused the housing chaos and could act as an incentive for them to foreclose rather than find ways to help struggling borrowers stay in their homes.

Proponents say it will prevent blight in neighborhoods plagued by abandoned, foreclosed homes.

Democrats, seeking Republican broad support for Frank's housing plan, also added a grab-bag of measures Bush has sought.

Those included legislation to overhaul the FHA, to more tightly regulate government-sponsored mortgage giants Fannie Mae and Freddie Mac, and authority for state and local housing finance agencies to use tax-exempt bonds to refinance distressed subprime mortgages.

They also attached a housing tax credit of up to $7,500 for first-time home-buyers, to be paid back over 15 years.

The package permanently raises the limit on the size of loans FHA could insure and Fannie Mae and Freddie Mac could buy to $729,750 in the highest-cost housing markets. Those caps are scheduled to fall at the end of the year, to $362,790 for the FHA, and to $417,000 for Fannie Mae and Freddie Mac.

[randynason]

Well, of course Bush would threaten to veto the measure. He doesn''t want to think about helping out the American people he is supposed to represent. Instead, he wants the money to spend on his favorite pet-project, the war.

[bozworth4]

Why? Nobody forced people to buy beyond their means. Let me see, I buy a house for $200,000, can''t pay for it, refinance and get $50,000 knocked off. Then 6 months later loose it to the government. Makes good sound, stable economic reasoning. LOL

[incog-nito]

When ordinary people get in trouble, it''s their fault and their problem. When big corporations like Bear Stearns get in trouble, then it''s no problem using taxpayer money to bail them out. Helping regular folk = bad. Corporate welfare = good.

[timdgrim]

Somebody tell Bush that this money would fight Al Qaeda mortgage terrorists, and he''ll throw hundreds of billions of dollars at it! SMF!

[tjbanshee]

he should veto it. i was one of the stupid people that got a house i could not afford. why should all of the tax payers pay for my stupidity???????? it is your fault that you got a house that you could not afford now grow up be an adult and deal with your mistakes. quit looking for hand outs.

[bgwinnett]

he should veto it. i was one of the stupid people that got a house i could not afford. why should all of the tax payers pay for my stupidity???????? it is your fault that you got a house that you could not afford now grow up be an adult and deal with your mistakes. quit looking for hand outs.

Posted by tjbanshee at 08:06 PM : May 08, 2008

Lenders and the buyers entered a co-coalition of the deluded, and yet while the ordinary joes have been left to sink, the financials'' have been rescued. In my book you either let 1st class and steerage go down or rescue both.

[timdgrim]

I think one of the problems, not all, but one, is the builders today build these cookie cutter, McMansions and don''t just build regular homes anymore. They''re all too big and too costly. People this day in time don''t want to live in just a regular home, they have to have these show off homes to impress the other Jack off materialistic people like them!

[veteran72]

If Neocons back Shrub and uphold his veto against the American Voters, it''ll be awfully quiet at GOPerv Headquarters on election night.....LMMFAO....
So long, Scumbags,....

[jumkey]

LOL! I''m an idiot!

Posted by bozworth4

Fixed.

[whigagain]

It is not the government''s duty to bail out companies or homeowners. Just like long-term welfare and endless government subsidies, it creates irresponsibility.

Americans are being brainwashed by politicians to rely on government for everything! It is amazing to read posts by obviously liberal-thinking people who do not know the impact government-controlled programs have on freedom and opportunity.

No true conservative should support this bail-out.

[tazmjam]

Pt 1
Many believe record high gas prices can be blamed for much of our economic woes. Our government tells us there is nothing they can do. Some people have suggested Hedge Funds and Futures speculation may be to blame. It appears they may not be that far off the mark. There are some Futures markets that are not regulated by CFTC. The OTC electronic markets was exempted from CFTC oversights and reporting requirements. No way to know who is buying or selling oil futures on OTC. Open to all kinds of greed or worse.. if someone wanted to sink the US economy this would be the way. Why is Washington and MSM ignoring this? PLEASE READ:

http://infowars.net/articles/may2008/050508oil.htm

Ref: article written by F. William Engdah
A June 2006 US Senate Permanent Subcommittee on Investigations report on %u201CThe Role of Market Speculation in rising oil and gas prices,%u201D noted, %u201C . . . there is substantial evidence supporting the conclusion that the large amount of speculation in the current market has significantly increased prices.%u201D
What the Senate committee staff documented in the report was a gaping loophole in US government regulation of oil derivatives trading so huge a herd of elephants could walk through it. That seems precisely what they have been doing in ramping oil prices through the roof in recent months.
The Senate report was ignored in the media and in the Congress.

[whigagain]

It is not the government''s duty to bail out companies or homeowners. Just like long-term welfare and endless government subsidies, it creates irresponsibility.

Americans are being brainwashed by politicians to rely on government for everything! It is amazing to read posts by obviously liberal-thinking people who do not know the impact government-controlled programs have on freedom and opportunity.

No true conservative should support this bail-out.

[mcvet]

It is not the government''''s duty to bail out companies or homeowners. Just like long-term welfare and endless government subsidies, it creates irresponsibility.

Americans are being brainwashed by politicians to rely on government for everything! It is amazing to read posts by obviously liberal-thinking people who do not know the impact government-controlled programs have on freedom and opportunity.

No true conservative should support this bail-out.


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Posted by whigagain at 09:02 PM : May 08, 2008
+ report abuse

Absolutely these people who were suckered in by slick promotions and without ANY oversight should bear full responsibility. The ONLY people who should get a bail out is the Large Corporations and supporters of the "Party"! SIEG HEIL MEIN FUHRER!!

[tazmjam]

Pt2
REF: http://infowars.net/articles/may2008/050508oil.htm

The report pointed out that the Commodity Futures Trading Commission, a financial futures regulator, had been mandated by Congress to ensure that prices on the futures market reflect the laws of supply and demand rather than manipulative practices or excessive speculation. The US Commodity Exchange Act states, %u201CExcessive speculation in any commodity under contracts of sale of such commodity for future delivery causing sudden or unreasonable fluctuations or unwarranted changes in the price of such commodity, is an undue and unnecessary burden on interstate commerce in such commodity.
The impact on market oversight has been substantial. NYMEX traders, for example, are required to keep records of all trades and report large trades to the CFTC.
In contrast to trades conducted on the NYMEX, traders on unregulated OTC electronic exchanges are not required to keep records or file Large Trader Reports with the CFTC, and these trades are exempt from routine CFTC oversight.
In contrast to trades conducted on regulated futures exchanges, there is no limit on the number of contracts a speculator may hold on an unregulated OTC electronic exchange, no monitoring of trading by the exchange itself, and no reporting of the amount of outstanding contracts at the end of each day.

Contact your Senator and Reps and tell them you want this loophole closed.

[mcvet]

If Neocons back Shrub and uphold his veto against the American Voters, it''''ll be awfully quiet at GOPerv Headquarters on election night.....LMMFAO....
So long, Scumbags,....


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Posted by veteran72 at 08:22 PM : May 08, 2008
+ report abuse

LOL Yep bro! After sitting on their hands while reject after reject went by them and proved to be as Incompetent as any Administration in HISTORY, they stop any relief for American''s caught up in the "Trickle Down" melt down... They should just leave and not bother with the vote! Sieg Heil Bush

[mcvet]

This country is in debt over its head already, why bail out people who want to live beyond their means?
Folks who took out adjustable rate mortgages and now cannot afford what they knew was coming do not deserve sympathy or support. It is not Bear Stearns fault, it is easy-spenders "Keep up with the Joneses" fault. It is not my fault, or the governments fault, so neither I nor the government should chip in to help.


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Posted by bullyforhim at 08:58 PM : May 08, 2008
+ report abuse

Ummm! Can you explain WHY this nation is in debt so badly??? IF memory serves John McSame, George Bush and the rest of the Fascist were handed a BALANCED BUDGET AND A SURPLUS! They said they could do "Trickle Down", give the wealthy a Tax Cut and it wouldn''t hurt. Now are you saying they were full of Krap??? ROFLMAO Sieg Heil Bush

[mcvet]

Jimmy Carter passed laws so that anyone who wanted to could buy a home. This law is finally coming home to roost. Too many banks lent money to folks who did not realize money does not grow on trees. Now this generation of Dems wants to continue to support reckless money management. Forget it!


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Posted by bullyforhim at 09:07 PM : May 08, 2008
+ report abuse

Now EVERYONE knows wearing a Swastika cause''s you mental problems but Blaming Jimmy Carter for this melt down??? Man you REALLY need to stop going to those Nazi Youth Rallies... IT was YOUR "PARTY".. the Fascist Republicans who REMOVED all the regulations on these lenders!!! It was the Republican Fascist who trashed the Bankruptcy Laws which would have DEALT this this problem if left alone!! Good GRIEF!! Sieg Heil Bush... Dumb as a box of rocks!!

[veteran72]

It''ll be as much fun watching the Rubber-Stampers jumping the SS Shrub and voting for veto override, as it will to see them on election night viewing the end of their Party!!!...LMMFAO!!!...So long, Dirtbags!!!

[whigagain]

Ummm! Can you explain WHY this nation is in debt so badly??? IF memory serves John McSame, George Bush and the rest of the Fascist were handed a BALANCED BUDGET AND A SURPLUS! They said they could do "Trickle Down", give the wealthy a Tax Cut and it wouldn''''t hurt. Now are you saying they were full of Krap??? ROFLMAO Sieg Heil Bush

_______________________________________

If you are want to understand facts instead of cute names for politicians you dislike, then you would know the largest portions of the "debt" are from government programs passed by George Bush''s administration (Medicare Prescription Drug Benefit, bloated Highway, Farm and Energy Bills, Title I, No Child Left Behind. But the reality is... the Democrats loudly proclaim all of the expensive entitlements are "under funded" (that means they would have spent more).

Libertarian is the true party of freedom!!!

BTW. Fascism more resembles the policies of Democrats not Republicans.

[barbaraf4]

We need to quit bailing out everyone who has made a stupid decision. This includes Chrysler, any airline and all the people who thought they could skate.

[bgwinnett]

And if I am not mistaken, Dems control both houses now.

Posted by bullyforhim

Albeit with a majority which is not filibuster proof.

[veteran72]

And if I am not mistaken, Dems control both houses now. Congress passes laws, not the Executive Branch.

I got your Seig Heil right here.


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Posted by bullyforhim at 09:19 PM : May 08, 2008
+ report abuse

Get a GED, dumbazz, it takes 2/3rds majority in both houses to override a "Presidential" veto.
Man you guys are dullards....

[mcv57]

This is another government propaganda stunt: Wag the Dog - fa-sod style. Really folks, the bushwacker know this song and dance like the back of his behind.

[sgtrds]

If it benefits his big corporate friends he signs it. If it''s more money to war contractors for his bloodbath in Iraq, he signs it. If it''ll help ANY average American he says scr*ew you!

Bush does not now and never did care.

[veteran72]

BTW. Fascism more resembles the policies of Democrats not Republicans.


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Posted by whigagain at 09:23 PM : May 08, 2008
+ report abuse

Congress and the White House allocate $522 billion a year to the Defense Budget.

To put the level of U.S. Defense Spending in perspective.
%u2022 $19 billion is the annual shortfall to eliminate starvation and malnutrition globally.
%u2022 $12 billion is the annual shortfall to provide education for every kid on earth.
%u2022 $15 billion is the annual shortfall to provide access to water and sanitation.
%u2022 $23 billion is the annual shortfall to reverse the spread of AIDS and Malaria.

Source: World Bank
Defense spending in the united states $


Fear Beyond Reason?
According to USAID, there
are 115 democratic countries
in the world. None of them
spend near as much as the
United States does to protect
their freedom.

Located between the Pacific
and Atlantic Oceans, the
United States has one of the
safest locations on earth.

[veteran72]

Hey Bush haters.

Have we been invaded since 9-11?


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Posted by bullyforhim at 09:42 PM : May 08, 2008
+ report abuse

Hey Neocon, have you checked your chances in the upcoming elections???....LMMFAO....clueless....

[sgtrds]

Now this generation of Dems wants to continue to support reckless money management. Forget it!

Posted by bullyforhim at 09:07 PM : May 08, 2008

Reckless money management? What an ignorant thing to say! Bush and his cronies STEAL nearly $1 trillion dollars of blood money from the American taxpayers by waging a war for the profits of war contractors and you somehow have the gall to try to blame Democrats for this mess he created! this is not an administration, it''s a crime family and the American people are it''s victims!

[sgtrds]

Hey Bush haters.

Have we been invaded since 9-11?

Posted by bullyforhim at 09:42 PM : May 08, 2008

Hey as*shole, that hasn''t a dam*n thing to do with this issue OR Bush. he''s made the nation and the world a lot LESS safe then more! He''s been Bin Laden''s greatest recruiter to the point where one begins to wonder who is paying him more, us or them.

[mrvmann]

1 Billion a week in Iraq? Seems like a no brainer

[veteran72]

Be back soon....time for a food run....

[rplat]

This is absolute nonsense that we the taxpayers have to bail out a bunch of irresponsible people that can''t pay their bills. I''m just not sure who I hold in more contempt, the pandering politicians or the irresponsible buyers.

[sgtrds]

I''''m just not sure who I hold in more contempt, the pandering politicians or the irresponsible buyers.

Posted by rplat at 09:50 PM : May 08, 2008

Try the Bush people who have robbed this country blind!

[bsimon2007]

Ugh. I don''t like bail-outs, on principle.

But what MRVMANN said...

[bgwinnett]

Republicans argued the package reward lenders and irresponsible borrowers at the expense of homeowners and renters who made more prudent choices and are straining to cover their costs in a punishing economic climate.

____________________________________

So from that, I guess that they won''t be bailing out Fannie Mae or Freddie. Best not hold my breath.

[chitwn4]

I see the phrase "irresponsible people" mentioned here, which is a real shame. These contracts had these adjustable rates buried so far deep in them a lawyer would have a hard time finding them. The total lack of compasion shown on this blog is the reason we have had the last 20 years of a GOP controlled government *** the people. Compare the standard of living today against how Americans in the 60''s & 70''s. Vote for McCain and when the house next to yours or down the street is foreclosed, see what it does to your homes value.

[singingrick]

This is absolute nonsense that we the taxpayers have to bail out a bunch of irresponsible people that can''''t pay their bills. I''''m just not sure who I hold in more contempt, the pandering politicians or the irresponsible buyers.

Posted by rplat at 09:50 PM : May 08, 2008


The reality of the situation, skippy, is that the vast majority of people with sub-prime loans had good jobs, good credit and qualified for standard loans. The banks were giving commissions to loan officers to push variable interest loans and hid the details in the fine print. This all began when Republicans deregulated the banking industry which cleared the way for them to engage in predatory lending practices and speculative investments.

I don''t recall you squealing when Bush introduced his bank bailout measures.

I''m sorry that you are a moron.

[walt1944-2009]

The Great Emperor Bush II has stated that he plans on vetoing the bill passed by a big majority in the House which would HELP homeowners hang on to their homes.

Stating that HE is still "THE DECIDER" and knows what is best for everyone (SURE HE DOES!) the Great Emperor plans on vetoing the bill as soon as it hits the Oval Office. His "thinking" is that the government should NOT come up with a program to rescue homeowners, even though it is OK to push through a plan to "rescue" banks, mortgage companies, and wealthy home builders who started this mess in the first place!

Besides, that money is needed elsewhere such as fighting those nasty "terrrrrrrorists" in the Middle East, planning to attack and invade Iran and Syria and add them to the Great Emperor''s Middle Eastern Empire, and making Halliburton, KBR, and Blackwater even richer!

As usual, The Great Emperor Bush does not expect Congress to override his veto thanks to his faithful, stupidly-loyal neocon Fascist Nazi Republican "toadies" in Congress who eagerly await the Great Emperor''s instructions!

SIG HEIL, BUSH!!!!
sig heil, DEFINITELY MORE OF THE SAME, McCain!!!

[fairandbal]

Bush press secretary Katie Couric interviews her presidential hopeful John McSame and CBS doesn''t open comments on that article? wonder why.

[fairandbal]

This is absolute nonsense that we the taxpayers have to bail out a bunch of irresponsible people that can''''t pay their bills. I''''m just not sure who I hold in more contempt, the pandering politicians or the irresponsible buyers.

Posted by rplat at 09:50 PM : May 08, 2008


So you''re also not in favor of Bush''s continued ''bail out'' for the hard pressed oil industry? No problem giving tax breaks to the ''struggling'' multi billion dollar oil execs and saying screw you to the average American.

[aupouvoir]

"Call me Irresponsible" I am one of the newly unemployed with a mortgage that I can''t pay next month. Bush and his "War" is entirely to blame for this. Spend our money responsibly. When the Great Depression hit many people committed suicide rather that lose everything and face humiliation. The Blood of the lives lost in the future for all of this will be on Bush''s hands intermingled by our soldiers in the Gulf "War"

[on_alert247]

In the future I''d like you guys to bail me out when I make a bad investment. In fact, I''ll vote for anyone that pushes it.

[pollroller1]

I don''t think this bail out is a good idea. When my wife and I first got married we lived in a 20ft by 8ft trailer and we paid 60 dollars per month rent. That was all we could afford. We also had one very old car that I spent more time trying to keep running than we did driving. Again, that was all we could afford. Nobody bailed us out. We made it by working hard and by not spending money that we didn''t have. People need to learn to live with in their means. If you can''t afford your house, move into a trailer park and rent like we did.

[on_alert247]

So you''''re also not in favor of Bush''''s continued ''''bail out'''' for the hard pressed oil industry? No problem giving tax breaks to the ''''struggling'''' multi billion dollar oil execs and saying screw you to the average American.

Posted by fairandbal at 10:14 PM : May 08, 2008

As I recall it was Pres. Bush that pushed for the tax rebate you got. As for facts about the oil industry tax breaks, Exxon-Mobile paid $30B in taxes for 2007 at a 41% rate on taxable income. How much did those "huge" tax breaks save them, less than $2B. And to think those tax breaks are to produce and refine in this country vs. abroad. In fact, if you wipe out the tax break, total industry revenue for the govt. is around $13B. So how much did that tax rebate cost the govt., around $168B. So in about 13yrs, the govt. will recoup the cost of our tax rebate from that "huge" tax break the oil companies get.

Just a little fact behind the lib rhetoric.

[beehive21-2009]

Disturbing very disturbing.Look into the future,what do you feel ? lots of greedy fat folks being hung, ,beheaded,burnt, u keep up d greed u c.

[lucasnico]

As I recall it was Pres. Bush that pushed for the tax rebate you got. As for facts about the oil industry tax breaks, Exxon-Mobile paid $30B in taxes for 2007 at a 41% rate on taxable income. How much did those "huge" tax breaks save them, less than $2B. And to think those tax breaks are to produce and refine in this country vs. abroad. In fact, if you wipe out the tax break, total industry revenue for the govt. is around $13B. So how much did that tax rebate cost the govt., around $168B. So in about 13yrs, the govt. will recoup the cost of our tax rebate from that "huge" tax break the oil companies get.

Just a little fact behind the lib rhetoric.
(posted by on_alert247)

the last time this much *** was slung we attacked Iraq

[on_alert247]

From Feb 16th, 2000: No one can predict the future. But the Clinton Administration is confidently forecasting that the huge U.S. trade deficit with China will improve if Congress accords China permanent normal trade relations (PNTR) in order to accommodate Beijing''s membership in the World Trade Organization (WTO).

Want to blame someone for the deficit, look back 10years. BTW, the entire "War on Terror" accounts for less than 20% of the accrued deficit during the same time period. Sorry AuPouvoir, your barking up the wrong tree.

[on_alert247]

lucasnico,

Don''t bother with the facts. The rhetoric is more than sufficient to appeal to the masses.

[lucasnico]

yep, and those rebate checks will fix everything!! Geez, that''s enough money to fill up the car 14 or 15 time......oh wait, the price of gas went up again... more record profits for the oil companies...but your boy will fix everything, and that''s the only fact that matters now isn''t it!

[payasyougo]

President Bush just needs to sign this into law so congress can move onto the equivalent legislation of credit card refinancing for folks that were duped into charging things they didn''t need. Then after that congress can step in and rescue folks that were duped into car leases. Then congress can step in and rescue folks that were duped by brokers into buying investments that went sour.

I''m sure I''ve missed some...

[on_alert247]

Let me clear things up here:
1) Bush isn''t my boy
2) The "huge" tax break for the oil industry while I don''t think is justified amounts to only 8% of the free money tax rebate
3) This whole article is about the justification of giving money away to people that made bad investments
4) You want to tax Exxon-Mobil more? Go ahead and you''ll be walking to work for what a tank a gas will cost.

Go get a book on accounting.