Today, President Bush is expected to announce ‘Project Lifeline’- a new program designed to help homeowners that are behind 90 days or more with their current mortgage to aid in stopping foreclosure.
Six banks have agreed to take part- Bank of America Corp., Citigroup Inc., Countrywide Financial Corp., JPMorgan Chase & Co., Washington Mutual Inc. and Wells Fargo & Co.
From what I’ve gathered it will suspend foreclosure for 30 days to allow the homeowner and lender to come up with new loan terms. While this may help a very small percentage, I don’t believe this is the magic bullet that congress and lenders are looking for. I’m curious to what the expectations are with the program. It will be interesting to see how this plays out.
What do you think? Do you think this proposal is another waste of time or a step in the right direction?
I agree 100%, no one twisted these homeowners arms (hopefully) to take out these loans. The financial institutions shot themselves and owner in the foot
and now want taxpayers to bail them out? Any politician that goes for that should
go themselves.
Sounds like they’re trying to use a band-aid to stop the bleeding from a major surgery. Bottom line is, Banks aren’t about to talk “Let’s make nice and work this out” once they’ve begun the foreclosure process with a homeowner.All it’s likely to do is make an already bad situation worse by prolonging the inevitable and the lenders are still going to lose. All I wanna know is… “What were they thinking?” (or, were they? thinking, that is)
Right on, Derek! This is like trying to stem an avalanche with a snow plough…
Banks are going to take a greater hit with this “initiative” on the long run.
It is only intended to enhance George Bush’s image.
Sorry to disagree with the 2 previous opinionated responders. I agree that this is a band-aid attempt to help(???). Let’s get to the root of the problem which was greed on the part of everyone involved. Lenders wanting to make money off the arms and buyers who wanted to get rich quick. I have suffered from the foreclosure market losing about 4 mil in assets and about $600,000 in dollars. My credit scores were in the 800′s when the bubble burst, I expanded too quickly and ran myself too thin. I lost several properties to foreclosure about 6 out of 49 that I owned including my primary residence. I wasn’t out for the almighty dollar but out there to help others know the joy of home ownership. I have lost big time but I have not declared bankruptcy I am being responsible for the debts I have created. Am I still doing real estate, you betcha. I am just being really careful and smart and may be able to rebuild my portfolio. I believe that since the values of all properties have been reduced, all loans should be renegociated for the new values of the properties and that will allow everyone a chance to level out this mess. This would be fair to all of the owners who have been making their payments on time. Also, the feds could use financial planners to help get these loans renegociated so the banks have some help repairing their mess. There are still people out there who are still trying to cut deals with lenders to get loans, I don’t think that is ever going to change. Suspend foreclosures for a while, let owners find buyers, charge a fee–flat or percentage of value that would allow someone else to assume a mortgage already in place on a property and allow refinancing off an arm. We have to be coming up with more solutions than this one. we need people who really understand the meaning of foreclosure to help devise solutions.
Derek, it can’t really hurt & if it helps some…God bless them….but what I think might help if this provision that conforming loan limit will be raised in some areas. It is hard to be a homeowner in these more expensive areas, and it will relieve some of the loan regulations that are now put on a borower.
An absolute waste of time and MY money. We as taxpayers will pay for this bail out. I pay my mortgage and I don’t see anyone rushing in to give me a better rate. It’s just another “feel good” election year strategy. The reality is just as there were thousands of foreclosures in the early 90′s, it must happen again today. The government cannot fix it – probably only make it worse.
I think that the measure is a temporary adjustment to allow these “creative financing”
lenders to get what they have been wanting all along,
If you might of noticed these new reset loans and refi loans are going to be insured by FHA so I think that we as investors have the best deals and opportunities still to come it will take 12-18 months for this to take affect, only the families that are not in the rear now will benefit the most.
It will do SOME good. The homeowners who mistakenly got in over their heads, had unexpected medical expenses or other unfortunate experiences will be helped out with this plan.
The deadbeats won’t be able to qualify for the ultimate refinance.
So what’s wrong with that? The good guys, though unfortunate, will be helped.
Those with other credit issues who purchased their homes in an irresponsible or fraudulent manner will be foreclosed out with only a month or two delay.
I don’t think our government thinks things through as they should. What I have observed during my life here on earth is that for every problem the government tries to fix, ususally one that they created in the first place, several more crop up out of it.
I don’t know of anyone who believes this is a “magic bullet” solution. Though I have not read the details of the signed bill, it will help some people, by buying them time to try and work something out, and that is it. However, I believe we will continue to go through this time of heavy foreclosure activity for another 12-18 months (or at least until home prices stabilize somewhat).
There is not going to be any solution to this problem, that will not hurt. Individuals who purchased more home than they could possibly ever afford under normal circumstances, and now have a home with negitive equity and payments they can’t afford to make. Banks and S&L’s and other loan providers, writing off billions. Institutions and Investors in paper, having to sell at a heavy discount. Simply demanding a stop to all foreclosures, is not going to solve anything.
I agree that the government is usually slow to respond. This problem should have been seen years ago and an effort to curve the situation then taking some proactive measures instead of staying in reaction mode. I’m glad they’re at least making an attempt even though I don’t think they fully understand the situation.
Our government is too worried about whether Roger Clemens used steroids instead of taking a proactive stance. Talk about a waste of government spending?
Now, for those of you that are wishing for the universal health care plan that’s being pushed by some of the democrats. Think for just a second what a mess this will be once the government steps in.