Tweet
Last year, Congress passed a bill which, in the best tradition of the Bush Administration, bore an opposite title: the Hope for Homeowners bill, and appropriated $300mn to back it up. It was, of course, a total failure. Exactly 1 home was “saved” by the bill. The concept of the bill was that lenders would cut the principal due on the mortgage to 90% of the current value, and the FHA would insure the new mortgage. Lenders don’t want to do that because it would require them to take an immediate loss, and since the program was voluntary, they didn’t.
This week the Money Party decided it needed to have something to show they were helping homeowners, so they gave us the Helping Families Save Their Homes Act. The Banks didn’t care enough to stop this silly statute. All they wanted was to strip the effective part out of it: the bankruptcy cramdown. Once that was done, they released their servants to pretend they were helping homeowners. Our congressionals are congratulating themselves on this worthless piece of legislation. From Nancy Pelosi: “The Helping Families Save Their Homes Act will help strengthen the housing market, our economy, and help restore the American Dream of homeownership.” No it won’t. Everyone, including CNN Money, knows that.
"Writing down principal is the last thing you want to do because you have to realize the loss immediately," said Paul Leonard, a spokesman for the Housing Policy Council, a coalition of mortgage lenders.
But, it fits in well with the equally pointless legislation the banks allowed Congress to pass on credit cards. That one might reduce costs to consumers by a few dollars. But not to worry, banks are quickly raising interest rates on the customers in hock. The Fed tells us the average credit card rate went from 12.03% to 13.08% in the first quarter. Oh, and banks are raising fees on their good customers, so we all get to pay.
Elizabeth Warren of the Congressional Oversight Panel offered a detailed explanation (pdf) of the causes of home foreclosure, and ideas for dealing with the actual problem. Congress had no trouble ignoring her group, with its politically incomprehensible emphasis on actually helping homeowners: a quick snap on the leash by their Financial Masters was enough to make them remember their real loyalties.
24 Comments
Support this site!
Subscribe to the newsletter
Advertise on Firedoglake
Send
us your tips
Make us your homepage
About Firedoglake
Zed!
…as in sign up for a credit card with zed interest and zed protection!
Masaccio: I prefer to call them the Exploitation Party. but Money Party works since it has fewer syllables and everyone can understand it.
Well, it’s true enough that the banks won’t be happy until they get all the money.
$300 million and **one** (1) house was saved?!!
It’s pretty hard to function without a debit-credit card these days.
How do we figure out which credit cards, or companies, aren’t going to screw those of us who have tried like hell to be responsible?
(Some days, I really think that we have too few people growing food and caring for people; it leaves too much need for bogus, crapola forms of ‘work’ like pushing mortgages and selling stocks. Sorry to be such a grump, but IMHO the people who grow potatos, lettuce, and dairy milk give a lot more to this nation — and then get screwed on their credit cards!)
Incredibly frustrating.
Whoever can pull together the money for a sane, low-fee, premium rate credit card that’s only offered to those with ‘good credit’ ought to be able to make a dent in the market.
If anyone has tips on credit card options that aren’t going to enrich the likes of BoA and Wall Street, please leave info…
roTL, good point. I suggest that you move your accounts to a community bank or a credit union. Mine pays for any ATM fees at any machine, and doesn’t charge me. It also doesn’t charge me an access fee for using the debit card in foreign countries, and picks up the fees charged by the banks there as well.
The Bank of America reorganized after the Merrill Lynch acquisition, and put debit cards in with credit cards, and now they are looking for ways to make money on debit cards, including a fee for usage in other countries, currency conversion fees and a host of other stuff. So, I went shopping, and will be moving more and more in the direction of community banks.
Can’t wait to see the health care bill.
Who owns Congress?
I’m so sick of the congress crowing over their “victories” on really meaningless legislation when the truly needed work is not being done. They negotiate away all the worthwhile provisions and then expect a pat on the back when they pass legislation that does absolutely nothing but line some more pockets.
And the MSM plays along…
One of our local community banks has reported their best year ever.
Wall Street, but Party Chairman LimpBark has veto power.
Reminds me of:
The pretend to pay us and
we pretend to work.
So, they say. The same day the Act was passed we received a notice in the mails from Chase that we found too cryptic to interpret satisfactorily. However, a bit of research indicated that similar notices had been sent out around the beginning of the year to others. It was a major game change for those carrying this kind of debt, at any rate.
I belong to a credit union and I have so far successfully resisted getting a debit/credit card. No visa logo means that my card doesn’t work at many stores. When it doesn’t accept my card or the pin pad fails, I simply say I won’t complete the transaction and go somewhere else.
Even though I pay 3x the minimum, my interest rates went up from 14% to 22%. I have requested reduction in interest, but it’s not “doable” according to the friendly credit card company. I should be paid off in 10 months. After that Visa and Master can go fuck themselves.
At a rate of 300 million for one, the home saved must have been a defense contractor’s.
Thanks, Masaccio.
Of course, No Homeowner Left Behind didn’t save anyone from foreclosure. For people, this program wasn’t about this life, it was about the afterlife. A cruel joke where the consumer gets sucker punched, and Wall Street walks away with every kind of financial bailout imaginable, and some beyond imagination.
Truth or Consequences airing 175 hours a week: Absent the truth, we get the consequences intended by those who control what gets reported and how it’s interpreted.
There is Bill Moyers Journal on PBS each Friday night for one hour, but otherwise, it’s pretty much a fixed game show where Nancy Pelosi’s on trial for treason, Harry Reid can’t capitulate fast enough to lobbying interests, and Obama wants everyone to work together making the financial corporations whole on the back of the real economy.
When the demand for U.S. treasuries fails by mid-2010 to cover the trillion dollar bond auctions, Frontline will have to do a Meltdown sequel starring Bernanke & Geithner playing Greenspan & Paulson.
Buckle Up! EW has Breaking News, upstairs!
Breaking! Judge Walker Gets Ready to Penalize the Government in al-Haramain
That’s funny.
Thanks masaccio.
The crisis in homeowning is one of the fundamental problems which must be fully addressed if there is to be a real recovery. All of the plans to help homeowners so far have been last one everyone’s to do list and have all been geared to helping banks pretend their loans are worth more than they are so banks can pretend they aren’t bankrupt. Homeowners remain forgotten. The economy will continue to deteriorate this year. With the stimulus next year there may be some relative improvement and then in 2011 we will be worse off than we are now.
That is really funny in an awful kind of way.
masaccio wrote:
First, any attempt to get something past Republicans and Bush was going to be a ‘hail Mary’ attempt. They allowed the Hope for Homeowners bill because they thought they could ensure it would fail — and they did. They didn’t push for use of the law. However, just pushing that bill through helped bring to light certain things about the crisis and how it existed and how it might be tackled. We came to learn, for example, that many mortgages were fractured and distributed to the winds. We also learned mortgage servicers were severely limited on modifying mortgages. We also learned (importantly) about Credit Default Swaps and how those who held mortgages could ‘insure’ them and then wait for total default failure to collect 100% on their investment.
Second, when Obama took office he had a lot of problems and financial regulation was going to require Congressional action. Well, it too has been extremely busy. When IT passes the legislation on this we might begin to see some real stability and sanity return to the financial world.
We need to return to investment and not insured investment where 100% coverage means you don’t have to worry about crashing the world economy ’cause you’re covered. That single issue needs to be addressed in it’s many manifestations — CDSs rank high, leveraging on top of leveraging too, bad credit ratings is closely related, naked shorting was one, but I believe has been dealt with. This is why it’s so important for Congress to really work hard to finish financial industry regulation bills for the president to sign into law.
The quote given above also shows that CEO pay structuring is ensuring that there will be many Enrons as individuals shape companies into spongie-ATMs which they can squeeze for money at a moment’s notice without worrying about the on-going strength and vitality of their company. That kind of NOW NOW NOW raider mentality has got to disappear. Destructive Capitalism where you bet on the failure of your competitor and then you do everything you can to destroy them is similar. Let’s not destroy what has taken so long to create.
Regardless of whether it’s one you’ll like a lot, it will exist. Under Republican rule it would never exist.
When enough people do that the lenders will have to lower rates or give up on personal credit altogether. I can’t see them doing the latter, so I expect rates will come down, though I also expect some people will probably forego credit cards forever.
The Bush admin. made the program fail by charging large fees, extending the number of years you would pay, increasing monthly payments (yep!) and probably smirking. After that you know they didn’t want it to work.