Business News
US Senate approves 300 billion dollars to help homeowners
Jul 12, 2008, 3:00 GMT
Washington - The US Senate approved a bill Friday to protect homeowners tied to Fannie Mae and Freddie Mac in the wake of the smoldering real estate and credit crisis.
The legislation, approved 63-5 offers an estimated 400,000 to help struggling homeowners avoid foreclosure by refinancing their subprime mortgages into fixed-rate loans backed by the government, Bloomberg financial news service said. The bill also offers tax incentives to prospective homebuyers and sets aside 4 billion dollars to help communities buy foreclosed properties.
Together the government backers of real estate mortgages own or guarantee about half of all US home loans, or 5 trillion dollars worth.
Now a similar version of the bill must go before the US House of Representatives for consideration within the next two weeks, before a final draft is presented for President George W Bush to consider.
Although previously threatening a veto, the Bush administration has indicated a willingness to compromise. However, the White House has argued that setting aside cash for communities to buy foreclosed properties, would benefit lenders who own vacated properties rather than help individuals keep their homes.
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Older Talkback
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Any statistics on how many homeowners in distress are speculators and how many are unsophisticated borrowers/refinancers who were duped into a mortgage that seemed at first a godsend, and later a nightmare. My daughter was working at four part time jobs trying to help support her 3 very young children and keep up the mortgage payments on her home. She worked at four jobs in order to keep good credit and also because she couldn't affort child care. She trusted the lender enough not to read the fine print; not knowing her credit was good enough to have secured better terms elsewhere. She was 'awarded' the home in her divorce settlement (along with a mortgage, which she tried to refinance). All she wanted was to be able to have more time at home with her young ones, instead of dragging them with her to job after job. Now, all she wants is to save the home in which she's lived for ten years. If the type of loan she received is now illegal in her state, why can't it be refinanced into terms she can afford? None of the 'help' numbers she has called have helped with a plan to save the home. Why don't the greedy lenders help with refinancing. She doesn't want to foreclose; and she keeps trying and trying and trying to find a way. Her Dad and I (both retired on fixed income) keep dipping into retirement, and anything else we have to keep her head above water, hoping and hoping there will be an answer. She has always been an honest, responsible, and hardworking person. This is killling us all!
Do the math. $300 BILLION divided by 400,000 troubled households is $750,000 per troubled household. How do I sign up to be a 'troubled household'?
Will the Federal Reserve print this extra 300 billion or will they get it from somewhere else? Can someone please clarify this!
page: 1
ChrisWJul 13th, 2008 - 08:46:03
So much for the hidden hand of the market? Pity.
300 billion is a feather bed.
Taxpayers funding inappropriate decisions by investors is (in the final analysis) corrupt.
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