Ùnêmplóyed gets 12mos rent-free?

[BeenThere...DoneThat...]

...from Drudge:
Unemployed get 12 months rent-free under policy changes...

The Obama administration will require mortgage companies to extend more generous mortgage relief to help certain unemployed borrowers from losing their homes to foreclosure.

Under policy changes announced Thursday, mortgage companies that collect payments on loans backed by the Federal Housing Administration will be required to offer 12 months of forbearance for qualified unemployed borrowers. Currently, out-of-work borrowers with these loans can receive a minimum of four months without mortgage payments.

Firms that participate in the Obama administration’s Home Affordable Modification Program will also be pressed to offer up to 12 months of forbearance for unemployed borrowers, though that effort could be stymied by regulatory or contractual rules.

Housing officials said the changes could help tens of thousands of borrowers. Housing Secretary Shaun Donovan said he hoped it would “push the mortgage industry” to amend their offerings.

blogs.wsj.com/developments/2011/07/07/mortgage-aid-for-unemployed-expanded/



...is this necessary relief?

[Deleted]

Jul 8, 2011 8:18:31 GMT -5 @sroo4 said:

I saw that this morning. I think the only way this is going to help is that it will slow the flood of foreclosures hitting the market. Basically it's just another stall tactic.

Or more vote buying for 2012

[floridayankee]

Didn't Obama campaign against kicking the can down the road? Let's hide the true problems by pushing the consequences off on the future.

[Driftr]

Jul 8, 2011 8:32:23 GMT -5 floridayankee said:

Didn't Obama campaign against kicking the can down the road? Let's hide the true problems by pushing the consequences off on the future.

I thought so. It's why I voted for him. I believed that he had a unique opportunity to tell the American people that which they didn't want to hear and get us to accept that we had lived beyond our means for too long. He did not choose to have that conversation. He will therefore not get my vote next year.

[handyman2]

Well the question from an economic standpoint is which is the best option all around for the housing industry and the public. My first impression is that with the current employment picture is that it is just extending the inevitable.

[ugonow]

I thought so. It's why I voted for him.

McCain/Palin had a bigger homeowner bailout proposal than the one that was put in place. I am sort of mixed on this. I don't like free rides,but more empty houses does not do anyone good. I have a neighbor who has not paid her mortgage in over a year.The bank told her she could stay in the house as long as she kept it up, and the bank could put it on the market and show it. It beats another empty house going into disrepair,I guess.

[Deleted]

Unemployed get 12 months rent-free under policy changes...

This law (like every law) has 2 sides to it.

1. Helps out of work home owners "maybe" hold on to their homes. Also it makes the President appear to care about the little people which could get him a few more votes. It really just gives people a (more or less) free place to live for a year.

2. It denies the ability of companies that hold mortgages to recover any money for a year. That could really hurt people getting mortgages in the future because businesses loan money to make a profit. Why would they do that if they know that for a 1 year period they could lose money (by not making a profit on it). That makes CD's & even simple interest bank accounts much more attractive because until the government screws that up it is a guaranteed interest rate.
It's also another slap in the face for American businesses. Putting limits on them that they didn't have before. Sooner or later these businesses may start to falter in mass & it will be a good excuse for a government take over of all business. Just another step toward socialism. Sad to say that if you take small enough steps the people just aren't aware enough of what's happening to notice.

Yet another "idea" that sounds good but will end up hurting more than helping in the long run (unless you consider the agenda behind it).

Oh & don't forget that these are not just "companies" that this will hurt. There are people out there that own stock in those companies that depend on a return from the money they have invested. Once again, robbing from one part of society (the investors) to "float" another part of society (the non workers).

[EVT1]

2 sides for sure- nice to know you are with the banks

[BeenThere...DoneThat...]

Jul 8, 2011 10:30:51 GMT -5 EVT1 said:

2 sides for sure- nice to know you are with the banks

...just curious... where do you bank? US or international?

[djAdvocate]

Jul 8, 2011 8:18:31 GMT -5 @sroo4 said:

I saw that this morning. I think the only way this is going to help is that it will slow the flood of foreclosures hitting the market. Basically it's just another stall tactic.

if so, it might be a good idea. we are in the second wave of the mortgage crisis right now. it will peak this winter, and then gradually improve next year.

[Driftr]

Jul 8, 2011 11:35:15 GMT -5 djAdvocate said:

Jul 8, 2011 8:18:31 GMT -5 @sroo4 said:

I saw that this morning. I think the only way this is going to help is that it will slow the flood of foreclosures hitting the market. Basically it's just another stall tactic.

if so, it might be a good idea. we are in the second wave of the mortgage crisis right now. it will peak this winter, and then gradually improve next year.

Or a bad idea because getting it over with now might be better than setting us up for a third wave when all those who qualify for this 12 month extension get foreclosed on next year.

[djAdvocate]

Jul 8, 2011 11:51:31 GMT -5 Driftr said:

Jul 8, 2011 11:35:15 GMT -5 djAdvocate said:

if so, it might be a good idea. we are in the second wave of the mortgage crisis right now. it will peak this winter, and then gradually improve next year.

Or a bad idea because getting it over with now might be better than setting us up for a third wave when all those who qualify for this 12 month extension get foreclosed on next year.

only if you assume that 100% will qualify. i don't.

[Driftr]

Jul 8, 2011 12:24:32 GMT -5 djAdvocate said:

Jul 8, 2011 11:51:31 GMT -5 Driftr said:

Or a bad idea because getting it over with now might be better than setting us up for a third wave when all those who qualify for this 12 month extension get foreclosed on next year.

only if you assume that 100% will qualify. i don't.

My only assumption is that there will be some who qualify today that will still get foreclosed on 12 months from now and that those forclosures will be a drag on any projected 2012 housing recovery. The only way that doesn't happen is if 100% who qualify for the program do not end up in foreclosure when the program ends.

[djAdvocate]

Jul 8, 2011 12:29:15 GMT -5 Driftr said:

Jul 8, 2011 12:24:32 GMT -5 djAdvocate said:

only if you assume that 100% will qualify. i don't.

My only assumption is that there will be some who qualify today that will still get foreclosed on 12 months from now and that those forclosures will be a drag on any projected 2012 housing recovery. The only way that doesn't happen is if 100% who qualify for the program do not end up in foreclosure when the program ends.

i would agree that it would stretch out the impact of the problem LONGER, but where we differ is that i don't view that as a bad thing. time is an amazing ally for problems like these, in most cases.

[Deleted]

2 sides for sure- nice to know you are with the banks

Evt1 I am usually on the side of those that I feel are unfairly being screwed. In this case it would kind of be the banks but more with the investors (who own the bank stocks. I know of no national bank that is totally owned by one person). I feel that right is right & the government is totally 100% wrong here.

I realize that liberals tend to look at businesses (especially large businesses) as an entity and that they have no sympathy for entities. They either don't seem to feel any compassion for people owning stock in those businesses or feel that only the wealthy own stock in them & they are fair game to screw. I don't feel that way.

[formerexpat]

Awesome - wonder if I should position myself into redundancy, get a fat severance and then get mortgage forbearance for year.

This Obama guy is growing on me.

Stall the pain past the election. Everything that can be done to do that will be done.

[Shirina]

They either don't seem to feel any compassion for people owning stock in those businesses

Why should I feel sympathy for stockholders? Businesses pander to them anyway, which is a major cause of this "jobless" recovery. Besides, I thought having a diversified portfolio was the way to go these days. I'm sure that they are drawing dividends from other investments and aren't going broke.

And if they are ... tough. They should have prepared for this eventuality. Isn't that right? Because that's EXACTLY what you would say to an older person who needs help but didn't have loads of money to squirrel away for retirement. These stockholders should have saved, saved, and saved to ensure financial solvency in case their stocks tanked. If they didn't, too bad, so sad. I'll cry in my beer for them later.

[Driftr]

Jul 8, 2011 12:31:07 GMT -5 djAdvocate said:

Jul 8, 2011 12:29:15 GMT -5 Driftr said:

My only assumption is that there will be some who qualify today that will still get foreclosed on 12 months from now and that those forclosures will be a drag on any projected 2012 housing recovery. The only way that doesn't happen is if 100% who qualify for the program do not end up in foreclosure when the program ends.

i would agree that it would stretch out the impact of the problem LONGER, but where we differ is that i don't view that as a bad thing. time is an amazing ally for problems like these, in most cases.

I prefer to rip the band aid off.

[Politically_Incorrect12]

Jul 8, 2011 10:30:51 GMT -5 EVT1 said:

2 sides for sure- nice to know you are with the banks

How would you feel if a company ask its employees to work a year for free until they get back on their feet? I have a feeling I know what most people would likely say.

I am kind of surprised there hasn't already been a program where banks offer some sort of forbearance similar to school loans, where the interest still gets accumulated but you don't have to pay for X amount of time. It seems like it would make business sense.

[Politically_Incorrect12]

Jul 8, 2011 23:23:00 GMT -5 Shirina said:

They either don't seem to feel any compassion for people owning stock in those businesses

Why should I feel sympathy for stockholders? Businesses pander to them anyway, which is a major cause of this "jobless" recovery. Besides, I thought having a diversified portfolio was the way to go these days. I'm sure that they are drawing dividends from other investments and aren't going broke.

And if they are ... tough. They should have prepared for this eventuality. Isn't that right? Because that's EXACTLY what you would say to an older person who needs help but didn't have loads of money to squirrel away for retirement. These stockholders should have saved, saved, and saved to ensure financial solvency in case their stocks tanked. If they didn't, too bad, so sad. I'll cry in my beer for them later.

Wow....

[BeenThere...DoneThat...]

Jul 9, 2011 8:31:23 GMT -5 Politically_Incorrect12 said:

Jul 8, 2011 10:30:51 GMT -5 EVT1 said:

2 sides for sure- nice to know you are with the banks

How would you feel if a company ask its employees to work a year for free until they get back on their feet? I have a feeling I know what most people would likely say.

I am kind of surprised there hasn't already been a program where banks offer some sort of forbearance similar to school loans, where the interest still gets accumulated but you don't have to pay for X amount of time. It seems like it would make business sense.

...forbearance programs already do exist, to a point, in mortgages... I'd call them foreclosure proceedings, maybe... or refinancing... or lots of late fees and a very generous loan officer at the local branch...

...but SLs, due to govt. sanctions of their being non-dischargeable and such, makes the forbearance option a bit more profitable to administer, imo...

...but I'm also still thinking... it's a very interesting point...

[BeenThere...DoneThat...]

Jul 9, 2011 8:39:01 GMT -5 Politically_Incorrect12 said:

Jul 8, 2011 23:23:00 GMT -5 Shirina said:

Why should I feel sympathy for stockholders? Businesses pander to them anyway, which is a major cause of this "jobless" recovery. Besides, I thought having a diversified portfolio was the way to go these days. I'm sure that they are drawing dividends from other investments and aren't going broke.

And if they are ... tough. They should have prepared for this eventuality. Isn't that right? Because that's EXACTLY what you would say to an older person who needs help but didn't have loads of money to squirrel away for retirement. These stockholders should have saved, saved, and saved to ensure financial solvency in case their stocks tanked. If they didn't, too bad, so sad. I'll cry in my beer for them later.

Wow....

...agreed...

[Value Buy]

Out of curiosity, what happens to the property taxes and insurance during this period?
Are the banks responsible for paying them out of their own pocket for a year?

[❤ mollymouser ❤]

I wouldn't think banks would be responsible for property taxes unless they foreclose. (In the interim, they would just be a lien on the property, I'd think.) As to insurance, I could see the banks pay for that (if the homeowner doesn't) since the policies protect the bank as much as the homeowner -- possibly more. And I'm sure that the banks would then seek later to recoup those insurance premiums back from the homeowner.

[Opti]

My understanding is the program will be voluntary for the banks meaning very few will qualify and even fewer will actually get something like this. Its not really rent free as I expect the interest will accrue on the mortgage.


I don't think its a good idea, but the banks may go for it in a limited way to appear to be helping some people.
In reality most of them are sitting on the majority of the inventory they have and in no apparent hurry to clear it.

[Value Buy]

Jul 9, 2011 10:26:52 GMT -5 ❤ mollymouser ❤ said:

I wouldn't think banks would be responsible for property taxes unless they foreclose. (In the interim, they would just be a lien on the property, I'd think.) As to insurance, I could see the banks pay for that (if the homeowner doesn't) since the policies protect the bank as much as the homeowner -- possibly more. And I'm sure that the banks would then seek later to recoup those insurance premiums back from the homeowner.

Okay, but here is a Government agent, the President wanting banks to give up, temporarily, up to 12 months of payments, and then the semi-annual tax payments to local and state govenments will not occur.
I would think a former Community Organizer would think out the plan a little, and see some consequences across the nation and especially in the inner cities, of an even smaller tax income stream.
Personally, I think the loan moratorium might be the right thing to do, but the taxes have to be paid.
Think police, firemen, teachers..........more layoffs.....equal more forclosures.......

[handyman2]

To me a better solution for banks would for them to forgo the principile amount of the payment but still collect the interest, taxes and insurance portion if applicable. This would assure less stress on the banks bottom line and the home owner would still be providing a home for their families. If a home owner cannot meet this basic requirement then you might as well forclose because in 12 months the odds that their circumstances will improve anyway.

[BeenThere...DoneThat...]

Jul 9, 2011 12:00:44 GMT -5 handyman2 said:

To me a better solution for banks would for them to forgo the principile amount of the payment but still collect the interest, taxes and insurance portion if applicable. This would assure less stress on the banks bottom line and the home owner would still be providing a home for their families. If a home owner cannot meet this basic requirement then you might as well forclose because in 12 months the odds that their circumstances will improve anyway.

...and isn't this what we've kinda already seen already? 15yr mortgages became 20yrs, then 30yrs, now 40yrs... so the market has adjusted over time to the demand of the consumers, right?

[EVT1]

Jul 8, 2011 22:39:59 GMT -5 @oldtex said:

Evt1 I am usually on the side of those that I feel are unfairly being screwed. In this case it would kind of be the banks but more with the investors (who own the bank stocks. I know of no national bank that is totally owned by one person). I feel that right is right & the government is totally 100% wrong here.

I realize that liberals tend to look at businesses (especially large businesses) as an entity and that they have no sympathy for entities. They either don't seem to feel any compassion for people owning stock in those businesses or feel that only the wealthy own stock in them & they are fair game to screw. I don't feel that way.

Who is really going to get screwed- or better who is really going to be affected the most? If a homeowner gets a forbearance, the bank is hardly losing anything except interest payments for a year- do you think they will come out better in a foreclosure? They might still be sitting without any payments for a year or worse take an outright loss. The program said it was for qualified people- which may mean people that got behind due to a job loss or other issue and are now working again- just too far behind to catch up- for those people and similarly situated individuals I think it is a great idea. For a bank to just automatically foreclose (think BOA and the rubber stampers) without at least attempting to work it out is acting in bad faith- maybe this will force them to actually make a deal with some of the homeowners that can afford to keep them.

You can assume I am a liberal like everyone else does if you want, I am not, but I have no care in the world for most corporate entities or shareholder owned companies. I think the stock market has changed from a place to invest with growing companies to a pit full of liars and manipulators that screw the public and each other at every turn. I think the corporate construct has devolved from a legitimate means to protect a business owner to a tool to avoid paying what one owes. Are they ripe to screw- hell yes they are, as long as they continue to screw the rest of us. We would be a lot better off busting up these large entities and letting small businesses thrive.

An example I used before- when I was growing up we had family owned car dealerships, they did well and so did the employees, the customers got a square deal. Now we have dealership owner groups- stockholder owned management companies that run hundreds of dealerships- now the local dealers have to run much tighter to pay for a giant building full of unnecessary corporate tools, the CEO and his 10 houses, not to mention the shareholders- meanwhile the employees & the customers took it up the back door. Nope, no sympathy for those entities.

[maui1]

socialism is great until you run out of other peoples money........maggy had it right!