Bush Official: Mortgage Aid Not Working

Housing and Urban Development Secretary Admits Failure Of Efforts To Prevent Foreclosures

(CBS/AP)  Two government programs designed to help hundreds of thousands of delinquent borrowers avoid foreclosure are having negligible effects, a top Bush administration official acknowledged Wednesday. One program will be revamped immediately, and the other possibly in the near future.

Steve Preston, secretary of Housing and Urban Development, said both private industry and government efforts have fallen short as the foreclosure crisis has exceeded all but the most dire forecasts.

"The response has not kept up with the need," Preston said in a speech the National Press Club. "Many Americans who should be getting help are not getting help."

The "FHASecure" program announced in August 2007 has only assisted about 4,000 delinquent borrowers and "has really not met the need," Preston said.

The other, called "Hope for Homeowners," has received just 111 applications from distressed homeowners since it was launched Oct. 1.

"Few lenders have actually signed up, and few borrowers are submitting applications," Preston said. "So clearly we needed to make meaningful changes."

Some experts have been skeptical of the efforts to curb foreclosures all along, saying they are too slow and reach too few homeowners, as CBS News correspondent Ben Tracy reported last week.

"It's like having a boat full of water that is leaking all the time and each one of these programs is like giving someone a cup to bail it out," Guy Cecala of Inside Mortgage Finance told CBS News. "We need to be using buckets."

The HUD chief outlined changes intended to encourage more participation in the Hope for Homeowners program, which refinances cash-strapped borrowers into new government-backed mortgages.

He also said that housing officials are reviewing whether additional changes to FHASecure might help that program gain traction.

Last week, hundreds of lenders gave HUD officials an earful of criticism about the Hope for Homeowners program. They blamed drawbacks in the program's original design for their lack of participation. Among their complaints: lenders were required to absorb large losses on the delinquent loans.

Under the new rules, lenders would be allowed to take a smaller loss. New loans can be made for 96.5 percent of the home's current value, rather than the previous level of 90 percent.

Even with the changes, borrowers would still have to pay back half of any appreciation back to the government if they sell their house or refinance.

The new guidelines only apply to borrowers who are spending up to 31 percent of their pretax income on their home loans. Borrowers who are spending a larger share of their incomes are required to have at least 10 percent in home equity.

Preston also said that lenders who hold home equity loans or other second mortgages must not block the transaction, but will receive an small payment and a share of any eventual appreciation in return for doing so.

In addition, lenders will be allowed to create new 40-year mortgages, rather than the traditional 30-year term, which will lower the borrowers' monthly payments but cost them more in interest over the life of the loan.

Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, called the changes "very helpful steps and reflect a commitment to meeting the need for more aggressive action to diminish foreclosures."

However, consumer advocate John Taylor of the National Community Reinvestment Coalition said the changes "offer sweeteners for the lender and nothing for the homeowner."

Preston did not release updated projections of how many homeowners are expected to participate, but officials hope the new guidelines will help the program reach its original estimate of helping 400,000 distressed borrowers over the next three years.

[yvonne113]

this is a really bad situation. this is one of the problems: i paid for my home years in advance. got a notice that was never filed in any court that my home was being sold. i got a notice that was stuck on my door to leave. i had 15 days to clear this mess. no office was able to assist me and i had take these people to court and represented myself and won. dispite the judgement; the lender had no records with my name for anytypes of defaults etc.; but they had another judge sign a paper and sold my home in five minutes the same day. the commision on banking said their hands were tied and this would be a big case but there was nothing they could do at the time. meanwhile without any notice, while working, my family and i were tossed out into the streets and have no idea where our things have been dumpped. there is much more to this. But homeless without justification is very bad. there are no agencies to help people in my situation. due to no regulations. we are living without an address and no help.

[voxpopulus]

yvonne113, what are you talking about? If you had finished paying for your home outright, how did anyone else have the right to sell it?

[retmilspouse]

Wow. What a story. Not sure I believe it, but I''m sure readers on this site will dig deep into this one. You have to excuse my skepticism but what do you mean by "paid for my home years in advance"? Typically most homeowners pay a mortgage for a certain number of years, and then when your balance is zero, you get the title and the house is yours. Unless you have the cash on hand to pay on the spot for it, which some people do who are selling a larger more expensive home and downsizing to say a patio home or condo. Now if the house was paid for and you did some kind of funky refinancing to get cash for your equity with an unscrupulous lender that is your fault for falling for that kind of scheme. Otherwise I am sticking to my first impression that there is more to this story than meets the eye.

[scienceman1-2009]

I''m sure he or she means the loan was for lets say 30 years and they paid it off early like in 14 years - duh!

[apuan777]

yvonne113
sounds to me like you didn''t pay your mortgage and they foreclosed on your house...what you explained in your text doesn''t make a bit of sense.

[brianbwb-2009]

30-year mortgages are already far out of sync with the modern US economy, the percentage of jobs that last for 30 years is almost zero, and now they want to extend it to 40?

This is total madness, a blatant attempt to interfere in the "free market" system, by preventing the price to be brought back in line with the market. It is clear that Bush wants to maintain an artificially high price for real estate, as he has for all other industries whose prices have exceeded the market''s willingness to bear.

What is needed is for a home buying boycott, until housing prices are in line with the current American''s ability to pay, take back the bailout money, let the financial services airlines, auto, insurance, and health care segments fail, and be reborn as more relevant entities.

Some entrepreneurs will instantly fill the voids created by the failure of the present business models.

[lf1952]

All the "programs" in the world won''t change the credit scores, or the ability, of people to pay mortgages they should have known they couldn''t afford.

This is "personal responsibility" in action - if you accepted a mortgage (likely based on bad "advice" from sales people - your Realtor and Mortgage broker, I admit) you couldn''t pay, then you will lose your home. If your Realtor or mortgage broker provided you with professional advice that proved wrong - find an attorney.

My home has dropped ~$60,000 in value ( 20%), so I still owe FAR more than I borrowed, but I can keep up the payments because I calculated a budget before I accepted the loan. Should I lose my job and not find another, I will be a high risk of losing that home. That is MY problem and responsibility. NOT the taxpayer''s problem.

[mtminds]

Just handing money out trick or treat candy to the banks backfired eh?

No terms, no conditions, no duh.

[wardoglrs]

Read Dr Paul''s message and you will see the facts.
Google http://www.maxkeiser.com/

[alphaa10000]

lf1952 said, "All the "programs" in the world won''''t change the credit scores, or the ability, of people to pay mortgages they should have known they couldn''''t afford."
---

You must be GOP-- repeating the same lame, attempted defense of Bush and the GOP policy of deregulation. In the face of the Wall Street disaster, it is impossible to deny GOP deregulation of banking is a massive failure of conservative policy-- for which all of us must pay.

No, you cannot blame Wall Street on the Community Reinvestment Act, because even Bernanke saluted the CRA in 2007 testimony for its beneficial effect on the mortgage banking industry.

The culprits are the deregulated banks, themselves, who threw overboard all normal, prudent lending policy, and then imposed highway robbery on their hapless victims, a huge proportion of whom were minorities. In case after case, bank reps falsified employment status, credit history, and other qualifiers to convert solid, existing mortgages which the homeowners were paying into toxic paper.

Which they knowingly passed along to others, and finally, to us taxpayers. Heckuva job, GOP!

[slim1h2o]

"Many Americans who should be getting help are not getting help."
--------------------------

Understatement of the year......

[slim1h2o]

My home has dropped ~$60,000 in value ( 20%), so I still owe FAR more than I borrowed.

No, I think you mean.. You owe what you borrowed, it''s just what you purchased is now worth less money.

[scottyusa]

Glad Steve Preston is finally admitting the obvious. Banks seem only too happy to foreclose. This just pressures the government for more money for the banks. If the auto industry goes down then the banks will end up owning most of the real estate in the rust belt.

[hitoyou1]

No getting. Did you really think it would. With congress doing it, there is no way it was going to work.

[pirmin3]

Well, the important thing is that the bankers are going to get their billions in bonuses and the banks grease up the Congress. Business as usual.

[shanev137]

I hate to say it but this huge price drop really needs to happen.

All you people who paid 700K for those tiny little cookie-cutter homes are to blame for this mess we''re in. The only way out is for all those homes to become affordable again.

[countslapula]

ThatGuy56, the time to insure you "won''t be penalized" is long past. Every few months for a year and a half the Bush White house and Congress parroted the limp message "We should do something about these mortgage failures." There was lots of time to stave off the general depression this issue has caused. I don''t even own a house and I''m being penalized by the crappy economy with no solution or end in sight. Why should I be penalized?

Because, as with every single issue Bush has confronted, the problem is worse after he finished with it.... because he is a pitiful moron. But it''s hard to make time for a looming economic catastrophe, when you''re busy war-profiteering, crushing people''s civil rights, installing massive idiots in life-long positions, and blaming everything on Clinton. Also, until an issue affects someone rich, it''s not recognized as a problem for conservatives. If the Bush echo chamber can fix the blame for this on Clinton in about 48 hours once it happened, it''s really too bad they couldn''t find the time to use the government for anything but scapegoating ahead of the collapse.

Antother Bush administration disaster.

[irmcvet97]

I hate to say it but this huge price drop really needs to happen.

All you people who paid 700K for those tiny little cookie-cutter homes are to blame for this mess we''''re in. The only way out is for all those homes to become affordable again.

Posted by shanev137 at 06:26 AM : Nov 20, 2008

Right! We''re all just a bunch of whinners too? I personally do not know anyone who paid $700,000 for a home but the failure of the Financial System is the fault of the INCOMPETENT Bush Administration and his De-Regulate EVERYTHING Party! If Bush is Competent AND the Regulations our Fathers put on those Banks aren''t trashed, there is no problem, regardless of what these folks paid for the property!

All you people who paid 700K for those tiny little cookie-cutter homes are to blame for this mess we''''re in. The only way out is for all those homes to become affordable again.


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

Posted by shanev137 at 06:26 AM : Nov 20, 2008


Rightttttttttttttt

Ever hear of the free market? The prices were market prices and that''s not the buyers or sellers fault. A few months ago a 700,000 house was a bargin in many areas.

[irmcvet97]

No getting. Did you really think it would. With congress doing it, there is no way it was going to work.

Posted by Hitoyou1 at 06:05 AM : Nov 20, 2008


When did you graduate from the 6th grade?

Steve Preston, secretary of Housing and Urban Development, said both private industry and government efforts have fallen short as the foreclosure crisis has exceeded all but the most dire forecasts.

It''s embarrassing to find people this uneducated today! Nothing the INCOMPETENT Bush Administration OR his FAILED Party has touched in the last 8 years HAS worked. Let''s at least place the blame where it belongs?!!

[lf1952]

lf1952 said "My home has dropped ~$60,000 in value ( 20%), so I still owe FAR more than I borrowed."

slim1h2o wrote: No, I think you mean.. You owe what you borrowed, it''''s just what you purchased is now worth less money.
-------------
Yes, thank you. I now owe FAR more than the house is !worth!, or may EVER be worth. Thus, I can''t refinance, or do anything else, but pay the mortgage. I don''t HAVE to like it, I just have to DO it, or lose the home. MY responsibility, not yours, the government''s or the taxpayer''s.

Thanks for the help..sorry about that.

This is NOT Bush''s fault (almost everything else is, but not this.) The financial situation was brought about by (1) Americans accepting mortgages they couldn''t pay (2) Banks giving loans that could not be paid back by the borrower and (3) by a financial system that tried to bet on all prices going up forever (i.e. derivatives)...ALL should be held accountable. Regulators should have caught (2) and (3), but didn''t. Even as a true "Bush must be in the running for most incompetent POTUS in history" believer, I can''t lay this one at his door. American lack of education, judgment and an abundance of self delusion and greed caused this.

[perceptions5]

The market is tanking because "business" is looking into the future.

And the only thing they see is Obama, Harry, and Nancy.

A Chicago Gangster, a Las Vegas Mobster,and a San Francisco Snobster.

The economy is the TOP issue right now SO why hasn''''t The Emperor Without Clothes, Obama named his candidate to lead the US Treasury?

Of course the this new breed of liberal fascists that run the AP/CBS and the rest of our corrupt liberal MSM wolfpack press aren''''t going to run with that theme.

After all Obama is their boy wonder.

It''''s going to four years of major pain and suffering.

If you like the past two years that the Democrats have run our economy and Congress then you''''re going to love the next four years with the Dems in 100% control.

........Standby....

[chenz66]

If they really want to help the economy they should lower the interest rates on ALL home loans to help everyone, not just the people that are already in arrears. Doing this would potentially put several hundred dollars a month into property owners pockets so they can than recycle the funds back into the economy. It''s a win-win.

[cnjcc]

The reason our government mortgage aid program is not working is the same reason most other government programs aren''t working. Like the war on drugs, which has not curtailed use or availability, but has the drug producers making more money for the same amount of product. Like the war on terrorism, which has drained trillions from our treasury, and fostered historic levels of resentment and loss of respect across the globe. Like the Department of Energy; founded over 30 years ago to lessen our dependence on foreign oil, whose budget costs us 24 billion a year. Or how about their handling of Katrina ... or their regulatory and oversight role leading up to the current economic crisis ... or the drastic loss of world respect and admiration, consitutional abuses, loss of personal freedoms, corruption by public officials ... etc. etc. etc. The reason is that our government officials are more concerned about maintaining their own positions, money, influence and power than they are about governing. Sadly, it''s a long fall from the lofty ideals of our founding fathers.

[zaniacloclo]

The market is taking a hit because there is a lot of fear out there. Obama has not appointed a treasury secretary so no one knows where he stands. Our governement seems to be lost and the prospect of the new administration without a realistic approach to our crisis seems even scarier than what we have now.
To help the homeowners right now will not make a difference, there is still a credit crisis out there with the banks. Bank liquidity is the issue and the world needs to fix that not just the US. Obama needs to speed up his cabinet appointments and put people in such positions that will instill confidence to the world financial markets. Somehow that is not happening.The media needs to chill out and we Americans need to find new ways to survive. The government does not have the solution right now.

[georgh2]

The fact is the majority of loan modifications and government programs, with all the rhetoric, have had low adoption rates and not worked for the people as forecasted. It is hard to wave a wand and change the past given the sheer size of the housing crisis. Stopping foreclosures a solid year plus into the full brunt of the housing crisis clearly is not the prime spot for the lenders to all of the sudden become kind to the distressed homeowners. The bankers and lenders are taking this action to save their own hides. 90% of loan modifications fail.

A real estate short sale is ideal in this environment. Provide the lender a comprehensive solution. Get the property sold and provide the lender a solution that they cannot pass up. Don''t expect the lender (or anyone else) to grant you an affordable solution to this predicament.

For more commentary on the housing crisis, visit our blog at http://blog.thenegotiatedsolution.com

[slim1h2o]

Posted by lf1952 at 07:43 AM : Nov 20, 2008

You''re welcome, and sorry to hear that you have lost so much. I have been placed in the same boat as you, but for different reasons that I will not go into.

But I do disagree with you on the fact that this not Bushes fault. (The Mortgage Crisis)

Did the high prices of gasoline have anything to do with it? Did the war on terror? We have seen a lot of money being shipped over seas and not going to the people that need it the most. All of the above has Bushes fingerprints all over them.

And also, How many of these illegal aliens, using fake I.D''s were granted these sub-prime loans, then bolted for the border, or where escorted to the border? Then promptly defaulting on those loans.

It did happen that some aliens did receive loans.

[jon_mccain]

In other news, president numbnuts has promised to veto a seven week federal extension of unemployment benefits for states with unemployment above 6%. What reason would president numbnuts have to punish those that are struggling in his "prosperous" economy? Why would he veto a six billion dollar program that may keep some of his fellow Americans from ending up on the street? Get this, "It''s fiscally irresponsible".

I heard this on Fox news radio this morning on the drive in, and even their reporter seemed incredulous of his reason.

[slim1h2o]

And also, How many of these illegal aliens, using fake I.D''''s were granted these sub-prime loans, then bolted for the border, or where escorted to the border? Then promptly defaulting on those loans.

It did happen that some aliens did receive loans.

The reason we have so many aliens here to begin with is because Bush failed to protect our borders, and still is not protecting our borders properly.

And yes, I know he was not the 1st president to do so. But this mess did come about on HIS watch as protector of our borders, economy, and constitution.

[ddaryl1]

Yes it is time to offer everyone lower interest rates, or refinance opportunities, so all consumers have more money in their pocket.

why shoudl the people who bought within their means, and have kept up their credit traing with responsibile purchasing not be helped out.

The only signal I am getting here is that it does not pay to be frugal. Allow me to refinance my 26 years left on a 6% mortgae to a 20 year 4% loan and I will have money and equity built up.

Butlets face it the corporations / wallstreet / banks are way more improtant than the people [/sarcasm off]

[gop_will_win]

We republicans tried to warn you liberals that government does not work. How many times does President Bush have to prove this to you?

[slim1h2o]

President Bush have to prove this to you?

Posted by gop_will_win at 08:52

8 times he has proven to be an idiot. We don''t need anymore proof of that.

[geneonlbk]

A depression happens when the best efforts and best intentions of a government fail to solve the problem.

[lancearmstng]

Agreed that Bush wasn''t a great president but to blame him for the current economy is simply wrong.

For anyone who enjoys learning facts and doing some investigation rather than just jumping along with everyone and making incorrect accusations because that''s the "cool" thing to do...

http://newsbusters.org/blogs/noel-sheppard/2008/10/27/60-minutes-financial-crisis-piece-ignores-election-ramifications

Take a look at what Congress passed on the last session of the 106th Congress, BEFORE BUSH WAS IN OFFICE

[perceptions5]

The market is tanking because "business" is looking into the future.

And the only thing they see is Obama, Harry, and Nancy.

A Chicago Gangster, a Las Vegas Mobster,and a San Francisco Snobster.

The economy is the TOP issue right now SO why hasn''t The Emperor Without Clothes, Obama named his candidate to lead the US Treasury?

Of course the this new breed of liberal fascists that run the AP/CBS and the rest of our corrupt liberal MSM wolfpack press aren''t going to run with that theme.

After all Obama is their boy wonder.

It''s going to four years of major pain and suffering.

If you like the past two years that the Democrats have run our economy and Congress then you''re going to love the next four years with the Dems in 100% control.

........Standby....

[lancearmstng]

why hasn''t CBS posted a story about how Iran now has produced roughly enough uranium to create a nuclear bomb?

[lancearmstng]

TJ, you''re being a silly goose. Explain to the class what Bush did to deregulate any further than what was occuring for the past 70 years.

Blaming Bush is the easiest thing to do because no one wants to take the time to understand the situation. It''s as much Bush''s fault as it is anyone who defaulted on their mortgages or spent on credit like someone that can afford to.

Of course the captain goes down with the ship but it''s even harder to charter the boat when all the passengers are poking holes in the walls.

[trillion1]

They put an idiot like paulson in charge. Who gives the money to the same people that s@rewed up in the first place. And they expect positive results?

[lancearmstng]

And i''m not saying he isn''t at fault either but don''t say he''s the only one responsible and don''t say that Democrats or Republicans are more responsible than the other. This country became overinflated with a sense of entitlement and greed on my levels. Obviously it''s greedy of the CEO to spend millions but how is it not greedy of the person who didn''t deserve to have a house to begin with and continues to rack up credit cards bills?

Do you need the new Kanye West CD the day it comes out? No. Do you need HBO, Showtime and Cinemax? No.

Everyone is at fault in this and to blame simply Bush is incorrect and just proves further that the masses will jump on board any blame-game to avoid the realization that we, as a whole contributed to this mess.

[lancearmstng]

and TJ, i''m sorry for calling you a silly goose. I got a little antsy and riled up.

[bjcone8559]

This country was built from the bottom up for more than two hundred years and became the greatest nation in history. Then Ronnie Ray Gun gave us ''trickle-down'' voodoo economics. From that day forward the fat-cats have been amassing the wealth and pushing to eliminate the middle class. This crisis is the end result of that republican ''vision for the future'', and now we see neocons in places of power trying to use it to further their goals. Republicans in congress are calling for auto makers to file chapter eleven and, in the process, break the union. They long for America to become a feudal state of lords and serfs. If your net worth is less than eight figures and you voted ''republican'' you have been duped. You are a serf in their eyes. In case you don''t know, Lords are the land owners... serfs own nothing.

[walt1944-2009]

As usual, efforts by private industry and the court of the Great Emperor Bush II have fallen short of helping homeowners stave off foreclosure and losing their homes.

This, of course, is typical of what the Great Emperor Bush II''s objectives have been since the day he walked into the Oval Office, namely, "A DAY LATE, AND A DOLLAR SHORT!"!

Anyone who expects any help from the Great Emperor Bush II will be waiting until Hades freezes over! Just ask the victims of Katrina, Ike, and those who lost homes in California wildfires and tornadoes in the midwest!

The Great Emperor is only interested in "helping" the highly-paid, highly-perked, totally-greedy, and absolutely-stupid corporate and financial executives who got us into this huge mess in the first place. To him, it is extremely important that the "ELITE" continue to enjoy their lifestyles and live the "American Dream", while everyone else lives the "American NIGHTMARE"!!!!

SIG HEIL, I LOOK LIKE I CARE ABOUT THE AVERAGE CITIZEN!!!, BUSH!!!

[lancearmstng]

How would the land be split up? I''d assume it would smaller land plots than by state-size, right? That would be too big, almost like individual countries.

AND, there would have to be a limit to land size unless it''s based by money. By the way, did you know that Ted Turner is the largest private land-owner in America?? Nothing against him by any mean, just a little tidbit of info. Maybe he''d have a large plot of land and create sub-divisions on his land. Ooooh, and then he can create teams of serfs and make them battle each other with weapons, fake weapons though. Real weapons would be dangerous and to be honest take all the fun out of it. Maybe laser fighting is what i''m getting at...

[lancearmstng]

Before I get back to the idea of serfs and lords...

Walt, the way I see it those "absolutely-stupid" executives aren''t exactly stupid. Con-artists, yes, even tricksters if I may be so bold and harsh. But absolutely-stupid? ehhh, can''t agree with you there. Unless everyone who earns a living higher than the previous person ends up in jail nothing will change. It''s always been like that. The rich get richer and the poor become, wait for it, SERFS!!!

So, back to important logistics. Ted Turner has his big plot of land filled with laser-tag playing serfs but what about the rest of the un-united lands of America? I''d like to think that we could turn it into many different themed areas. One could be like Water World, another like the Wild West (which would be my preference), one could be a Magical Castle theme.

Any other ideas? Come on guys. I can''t do this on my own.

[baby54boomer]

laissez faire has always been = "let it fail" and now it is = "left us f*#@ed"

[lancearmstng]

Babyboomer, are you suggesting a French plot of land?? I LOVE IT. Surrounding plots of land can be German, Dutch, British too! and maybe like once a week all those lands can get together for brunch and share cultures and foods. Oh man, this is going to be great.

[lancearmstng]

Tootall, would you like to live with me on my Wild West-themed plot of land? I like the way you think. In fact, I love it. You''re the first person on any news website that places blame on the public, where it belongs for the most part.

Which leads me to another idea for a plot of land!!! As an experiment we can place some people that live above their means in one land see how they survive. I bet it won''t be a pretty picture. They will be a group of well dressed land dwellers but they will all have to huddle around a flaming garbage to keep warm because they can''t pay off their mortgages.

You may say, wait a minute Lance, mortgages? Yes sirree Bob, mortgages. These fine folk will not have the sanctity of a Lord to house them because they are too special and can do what they want. These are the precise people that complain about how the GE executive has the private jet but they can''t have their Sean John socks. There is a reason for it... they''ve built themselves up to earn their spoils, most people haven''t.

But enough of this obvious, blaming the guilty party nonsense.

I need other ideas for plots of land guys. Whoa! Mind blowing idea. Have individual plots of lands for supporters of their favorite sports teams (But only if you live and die by the sport, no band waggoners. this way not everyone is split up by sports teams, only if it really means something to you)

[frankfurt200]

Of course the captain goes down with the ship but it''''s even harder to charter the boat when all the passengers are poking holes in the walls.


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

Posted by lancearmstng at 09:29 AM

Or when the people supporting the "captain" have employed the most predatory of lending practices. Oops! You forgot that one, didn''t you?

[frankfurt200]

From that day forward the fat-cats have been amassing the wealth and pushing to eliminate the middle class. Posted by nowaymcgoo at 09:49 AM

Indeed, the middle class has been in the way. Don''t forget what ENRON pulled on the State of California by inventing and implementing a sudden energy crisis, and how Bush sat back and punished the state for not voting for him. Yep, the middle class is in the way of all out complete greed.