Study: Bush administration blocked efforts to prevent housing crisis

By Daniel Tencer
Tuesday, October 6th, 2009 — 10:42 am

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Federal regulators in the Bush administration blocked attempts by state governments to prevent predatory lending practices that resulted in the financial crisis now stalking the American economy, a new study from the University of North Carolina says.

In 2004, the Office of the Currency Comptroller, an obscure regulatory agency tasked with ensuring the fiscal soundness of America’s banks, invoked an 1863 law to give itself the power to override state laws against predatory lending. The OCC told states they could not enforce predatory-lending laws, and all banks would be subject only to less-strict federal laws.

Now, a research paper (PDF) from UNC-Chapel Hill’s Center for Community Capital shows that those anti-predatory lending laws had actually worked. States that had stricter regulations on issuing mortgages were found to have fewer foreclosures.

"We believe that these findings are remarkable, since they suggest an important and yet unexplored link between [anti-predatory lending laws] and foreclosures," the study’s authors state.

The study may be the first scientific evidence to back up claims made by many critics that the Bush administration and earlier administrations allowed last year’s financial crisis to happen by not enforcing common-sense regulations on lenders.

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hello, this is kinda confusing when i aske about the foreclosures….i might be facing one…i called the bank and they said that if foreclosure happens then i have to pay the difference in between…lets say i owe 80 000 on the house and they auction it for 10 000. do i realy have to pay that 70 000 in between and what if i ABSOLUTELY DONT have the money to pay for it????

and i guess the banks dont really care about that…they sell it for the first one who bids on it!! right???

Technorati Tags: banks, Foreclosure, foreclosures, money

I didn’t believe the Homeowners Affordability and Stability Plan is to make my taxes pay my neighbor’s mortgage payments. I thought my taxes were going to stabilize the housing industry by preventing foreclosures by readjusting mortgage amounts back to a socially acceptable 38% of a families income, or if that wasn’t enough the government would pitch in 7% to bring it down to 31%, with the difference being made by extending the lease of the mortgage.

For example, my neighbor had to foreclose his condo because he had applied for an ARM (which he now knows is unwise, he hadn’t learned or god forbid been told by the lender what that meant) and got a 0,000 loan. He made his payments on time, 00 a month for the first two years (they were interest only). Two years later, his interest rates readjusted to make his monthly mortgage payment 00, while his property value had lost 0,000. He tried paying the 00 a month, but considering it was just interest on the loan, and rents in the area are 00, the whole thing was just a huge disillusionment. He tried to get the mortgage company to restructure, but they wouldn’t. He stopped paying, and the company got ,000 for the property through auction, losing 0,000 in the deal – ,000 or so that had been repaid.

This, extrapolated across the country, of course made everything extremely unstable, and is only now trying to be contained. For the above example, what I thought would have been extremely wise for Wilshire (the lender) was to take the homeowners documented income, (~5500 a month) make the mortgage 31-38% of that income, fix the interest rate, and extend the terms of the lease to be a 50-year mortgage. Homeowner stays in house, lender doesn’t lose 0,000 and the financial system is better stabilized.

I thought that was very close to Obama’s plan, and so I see this bumper sticker by the Tennessee Republican Party and think it’s irrational, inflammatory, and their head is in the ground.

My question is, am I misinformed, are they misinformed, or are we both wrong?

Thanks to everyone who read the entire post and considered the example.

Technorati Tags: affordability, auction, bumper sticker, disillusionment, foreclosures, god, housing industry, interest on the loan, interest rate, interest rates, mortgage company, mortgage payment, mortgage payments, neighbor, rents, tennessee republican party, wilshire, year mortgage

I am looking to sell my home in NY and purchase one in NJ. I have heard that foreclosures are at an all time high right now. How can I get information on foreclosures available in the area I am interested? I saw quite a few pay sites on the web, but I am afraid they are bogus. I suspect they will charge me and give me the information already avaiable on the web for free. I have excellent credit and a big down payment. Does anyone have any information that would be useful to me? Thanks.

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The Obama administration’s billion program to curb foreclosures isn’t working, and the White House knows it.

Administration officials blame the mortgage servicers charged with carrying out the mortgage modifications and refinancing under the federal program. Many of their Democratic allies on Capitol Hill back them up, but others are criticizing the White House for fumbling the execution. Whatever the reason, the program hasn’t stopped the rising tide of foreclosures: Experts predict that at least another 2 million homes will be lost this year, and the administration’s plan has so far reached only about 160,000 of the 3 million to 4 million homes it was supposed to protect over the next three years………

“Everybody understands that getting out of this broader crisis requires that we stabilize our housing market and stem the tide of foreclosures,” Senate Banking Chairman Chris Dodd (D-Conn.) said in a hearing Thursday. But in unusually harsh words for a Democrat, Dodd said that the Obama administration’s progress in stopping foreclosures has been “disgraceful” so far.

“It’s just hard to explain to the working families in America how it is we could move so fast with extraordinarily complicated deals with the huge financial institutions, and we are moving so incredibly slowly, mired in paperwork, in rules, in talking to banks back home,” said Sen. Jeff Merkley (D-Ore.).

http://www.politico.com/news/stories/0709/25095.html

Technorati Tags: administration officials, banks, capitol hill, chris dodd, conn, democrat, democratic allies, execution, financial institutions, foreclosures, harsh words, housing market, jeff merkley, news stories, obama, paperwork, rising tide, senate, white house, working families

I am trying to understand why exactly the government is focusing so much on bailing out companies like AIG, and costing taxpayers billions of dollars to do so. I know that there is a credit crisis, but why, other than the fact that Bush is a crony big-business guy, is all the focus on the corporations, and not on trying to help struggling homeowners to stay in their homes and slowing down the recession that way? Wouldn’t preventing foreclosures help the economy more? I just want to understand this.
I was referring to AIG, Bear Stearns, Freddie Mac and Fannie Mae, as well as this whole "Primary Dealer Credit Facility" business, all of which are corporate bailouts. How does rewarding corporate greed with a bailout help the US economy more than helping homeowners stay in their houses, paying steadily toward their mortgage?
Also, I understand that the "justification" for the bailout is that these corporations are too big to fail. The question that hasn’t been answered however, is how paying off the corporations solves the problem more than helping homeowners.

Technorati Tags: aig, bailout, bear stearns, billions of dollars, bush, corporate greed, corporations, costing taxpayers billions, credit crisis, economy, fannie mae, foreclosures, freddie mac, justification, mortgage, recession, taxpayers

I didn’t believe the Homeowners Affordability and Stability Plan is to make my taxes pay my neighbor’s mortgage payments. I thought my taxes were going to stabilize the housing industry by preventing foreclosures by readjusting mortgage amounts back to a socially acceptable 38% of a families income, or if that wasn’t enough the government would pitch in 7% to bring it down to 31%, with the difference being made by extending the lease of the mortgage.

For example, my neighbor had to foreclose his condo because he had applied for an ARM (which he now knows is unwise, he hadn’t learned or god forbid been told by the lender what that meant) and got a 0,000 loan. He made his payments on time, 00 a month for the first two years (they were interest only). Two years later, his interest rates readjusted to make his monthly mortgage payment 00, while his property value had lost 0,000. He tried paying the 00 a month, but considering it was just interest on the loan, and rents in the area are 00, the whole thing was just a huge disillusionment. He tried to get the mortgage company to restructure, but they wouldn’t. He stopped paying, and the company got ,000 for the property through auction, losing 0,000 in the deal – ,000 or so that had been repaid.

This, extrapolated across the country, of course made everything extremely unstable, and is only now trying to be contained. For the above example, what I thought would have been extremely wise for Wilshire (the lender) was to take the homeowners documented income, (~5500 a month) make the mortgage 31-38% of that income, fix the interest rate, and extend the terms of the lease to be a 50-year mortgage. Homeowner stays in house, lender doesn’t lose 0,000 and the financial system is better stabilized.

I thought that was very close to Obama’s plan, and so I see this bumper sticker by the Tennessee Republican Party and think it’s irrational, inflammatory, and their head is in the ground.

My question is, am I misinformed, are they misinformed, or are we both wrong?

Thanks to everyone who read the entire post and considered the example.
Wouldn’t you like to know* Is there any proof that we are paying for people’s mortgages other than the costs to refinance them?
xiphos* I don’t have any problem with what I explained. I think it should have been done over a year ago to stabilize financial flows. Mortgage fraud was horrendous in my area. I still have yet to see any proof that my tax dollars will pay my neighbors mortgage instead of their income.
If they are not using tax dollars to refinance the loans, and paying a 3rd outright, then I have a problem with that. Yet, I read the Foreclosure prevention act and I didn’t see the government offering any more than 7%.
Plowboy* Congratulations, I also bought a condo 30 year-fixed, 20% down, at a 3rd of my income. But where do you get off with that murderer crap? pendejo…
Plowboy, you’ve proven incapable of irrational thought, and if you want to influence others to consider your views as valid, you need to work on that. To link freeing murderers from assisting homeowners who were defrauded, is nothing more than verbal vomit.

Technorati Tags: affordability, auction, bumper sticker, disillusionment, foreclosures, god, housing industry, interest on the loan, interest rate, interest rates, mortgage company, mortgage payment, mortgage payments, neighbor, rents, tennessee republican party, wilshire, year mortgage

(continued) this company that works to prevent foreclosures. They said they’re working with my mortgage company to come to some agreement. In the meantime, the foreclosure assistance company told me everything was on hold — the payments, late fees, etc,, — however, I just received a letter from my mortgage company stating that I have 60 days until they take my house. I’m going to talk to the foreclosure assistance company tomorrow, but in the meantime, can someone help me make sense out of what happened and point me in the direction of a places that can help me not lose my house?

Technorati Tags: assistance company, company tomorrow, foreclosure assistance, foreclosures, late fees, mortgage company

to poor people as Ramadan presents in December?

Foreclosures: ‘Worst three months of all time’
Despite signs of broader economic recovery, number of foreclosure filings hit a record high in the third quarter – a sign the plague is still spreading.

NEW YORK (CNNMoney.com) — Despite concerted government-led and lender-supported efforts to prevent foreclosures, the number of filings hit a record high in the third quarter, according to a report issued Thursday.

"They were the worst three months of all time," said Rick Sharga, spokesman for RealtyTrac, an online marketer of foreclosed homes.

During that time, 937,840 homes received a foreclosure letter — whether a default notice, auction notice or bank repossession, the RealtyTrac report said. That means one in every 136 U.S. homes were in foreclosure, which is a 5% increase from the second quarter and a 23% jump over the third quarter of 2008.

http://money.cnn.com/2009/10/15/real_estate/foreclosure_crisis_deepens/?postversion=2009101507

Technorati Tags: auction notice, bank repossession, cnn, cnnmoney, default notice, economic recovery, foreclosed homes, foreclosures, marketer, money, plague, quot, ramadan, real estate foreclosure, report said that, second quarter, signs, spokesman, three months

If foreclosures just hit a record and the federal govt. owns to the two largest mortgage lenders, isn’t the economic "recovery" in serious trouble???

I know Wall Street is making profits, but unemployment continues to rise as well as foreclosure numbers.

http://money.cnn.com/2009/10/15/real_estate/foreclosure_crisis_deepens/?postversion=2009101507

NEW YORK (CNNMoney.com) — Despite concerted government-led and lender-supported efforts to prevent foreclosures, the number of filings hit a record high in the third quarter, according to a report issued Thursday.

"They were the worst three months of all time," said Rick Sharga, spokesman for RealtyTrac, an online marketer of foreclosed homes.

During that time, 937,840 homes received a foreclosure letter — whether a default notice, auction notice or bank repossession, the RealtyTrac report said. That means one in every 136 U.S. homes were in foreclosure, which is a 5% increase from the second quarter and a 23% jump over the third quarter of 2008.
stephanie……."It’s not in trouble because there was no economic recovery"

Yes, indeed.

Technorati Tags: auction notice, bank repossession, cnn, cnnmoney, default notice, economic recovery, federal govt, foreclosed homes, foreclosures, marketer, mortgage lenders, quot, real estate foreclosure, report said that, second quarter, serious trouble, spokesman, stephanie, three months, wall street