Archive for Friday, May 16, 2008

Housing rescue deal stalls in Senate

May 16, 2008

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— A key senator postponed action Thursday on a homeowner rescue package that could help half a million strapped borrowers get government-backed mortgages, as negotiators inched toward a bipartisan deal.

The delay on the action until next week clouded the prospects of an emerging compromise between Sen. Christopher J. Dodd, D-Conn., the Banking Committee Chairman, and Sen. Richard C. Shelby of Alabama, the panel's senior Republican. It also highlighted the tricky political calculations involved in reaching a bipartisan housing deal in an election year when the two parties are competing intensely to appeal to voters who cite the economy as their top concern.

Dodd and Shelby said Thursday that they were near agreement, but after hours of stop-and-start haggling, particularly over how to pay for the plan, Dodd canceled a committee session to vote on the measure. Also at issue was how tightly to regulate government-sponsored mortgage giants Fannie Mae and Freddie Mac.

"It is my desire that we fashion legislation that will enjoy broad-based support. It may not be possible in the end," Dodd said. "If it doesn't happen, so be it, but we're not going to have it not happen because we didn't try."

The stalemate comes as more U.S. homeowners are falling behind on mortgage payments.

Nationwide, 243,353 homes received at least one foreclosure-related filing in April, up 65 percent from 147,708 in the same month last year and up 4 percent since March, RealtyTrac Inc. said.

Nevada, Arizona, California and Florida were among the hardest hit states, with metropolitan areas in California and Florida accounting for nine of the top 10 areas with the highest rate of foreclosure, the company said.

Irvine, Calif.-based RealtyTrac monitors default notices, auction sale notices and bank repossessions.

One in every 519 U.S. households received a foreclosure filing in April. Foreclosure filings increased from a year earlier in all but eight states.

Comments

Godot 7 years ago

This housing "rescue" does nothing to solve the problem, it simply bails out the banks. It allows the banks to dump their absolute worst loans on the American taxpayers' backs, while the banks further prop up their balance sheets and profits. The people being "rescued" are, in the most part, people who did not have to put any money down on their loans in the first place, and many who did not have to prove that they even had the income to justify their loans. In any other business transaction, this would be called fraud.In the real market, these loans are selling for pennies on the dollar; under this proposed "rescue" the banks get to "sell" their toxic loans to the government for a guaranteed 85% of value. This is a huge, huge ripoff for the taxpayers, and a slap in the face for the 92% of American homeowners who honor their debts.Congress should stop trying to bail the banks out of the consequences of their bad business practices and start indicting CEO's, CFO's and boards of directors.

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