Sooner or later people have to stop borrowing money to buying luxuriy items, buying houses that are too expensive for their income, and learn to live within their means and now might be the time to start doing just that.
True. But what you seem ready to ignore is the legitimate (and necessary) borrowing that isn't occurring right now because banks won't lend.
True. But what you seem ready to ignore is the legitimate (and necessary) borrowing that isn't occurring right now because banks won't lend.
Banks won't lend because they have outstanding debt that they won't be able to collect, as timely as they figured they would. The economic expansion over the past say,,,,5 years, or during the housing bubble, was based on speculative buying, no real wealth was being created. So what we the working stiffs are told by the "experts" is that we must legitimize that unwarranted unsubstantiated lending practices over those years, by strapping our kids and grandkids with what is now an $800 billion "rescue", "stabilization", "bailout" bill filled with pork. If we don't go along with this, Wall St. is going to pull the plug on your portfolios and threaten your life savings.
If there's one thing the little guy should have learned from 1929 is not to trust your life saving in the stock market. So regardless of the passage of this bill, I believe the damage is done, because I for one am moving all my personal and 401K investment out of stocks and into bonds and much less volatile investments. And I'm sure many around the country are going to do the same.
By MARV CERMAK First published: Tuesday, September 30, 2008
Like many of us, I have longtime pals I speak with whose backgrounds run the gamut from butcher to baker to candlestick maker.
We have been predicting the financial system collapse for several years. Most of us are older than 55, products of the days when people lived within their means instead of on next week's paycheck.
We now agree if losers like us — who use fingers and toes to count — knew the bottom would fall out, how come lenders, politicians and top government staffers did not?
We also agree that they knew about the fraud but did nothing to regulate abuse. The lenders' profiteering at the expense of the nation was greed beyond belief.
Government staffers were also greedy, basking in the euphoria of an ocean of incoming mortgage tax/fee funds and new property assessment revenues from the bloated fake economy.
Politicians were greedy because they selfishly opted to sell out rather than rock the boat full of trusting voters. Some whispered warnings, but none had the honesty to blow the whistle loudly.
Of course, some of the borrowers were greedy types out to beat the system. Most were poor dopes who like many don't read the fine print.
One member of my ring of independent kibitzers is a longtime area educator. "Colleges and schools can teach people to do most anything, but they can't teach people not to be greedy," he said.
September 30, 1999 Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES
In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.
The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.
Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.
''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''
Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.
In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.
''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''
Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.
Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.
Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.
Home ownership has, in fact, exploded among minorities during the economic boom of the 1990's. The number of mortgages extended to Hispanic applicants jumped by 87.2 per cent from 1993 to 1998, according to Harvard University's Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 per cent and the number of Asian Americans by 46.3 per cent.
In contrast, the number of non-Hispanic whites who received loans for homes increased by 31.2 per cent.
Despite these gains, home ownership rates for minorities continue to lag behind non-Hispanic whites, in part because blacks and Hispanics in particular tend to have on average worse credit ratings.
In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.
The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants.
PIGGY POLS IN HOG HEAVEN WITH PORK-PACKED PACT By DAPHNE RETTER, Post Correspondent
October 2, 2008 -- WASHINGTON - Here, little piggies!
Congressional deal-brookers yesterday slopped a mess of pork into the $700 billion financial rescue bill passed by the Senate last night - including a tax break for makers of kids' wooden arrows - in a bid to lure reluctant lawmakers into voting for the package
Stuffed into the 451- page bill are more than $1.7 billion worth of targeted tax breaks to be doled out for a sty full of eyebrow-raising purposes over the next decade.
"This is how Washington works," said Keith Ashdown of Taxpayers for Common Sense, a Washington research group. "A big pot of pork is their recipe for final passage."
The special provisions include tax breaks for:
* Manufacturers of kids' wooden arrows - $6 million.
* Puerto Rican and Virgin Is- lands rum producers - $192 million.
* Wool research.
* Auto-racing tracks - $128 million.
* Corporations operating in American Samoa - $33 million.
* Small- to medium-budget film and television productions - $10 million.
Another measure inserted into the bill appears to be a bald-faced bid aimed at winning the support of Rep. Don Young (R-Alaska), who voted against the original version when it went down in flames in the House on Monday.
That provision - a $223 million package of tax benefits for fishermen and others whose livelihoods suffered as a result of the 1989 Exxon Valdez oil spill - has been the subject of fervent lobbying by Alaska's congressional delegation.
Some of the pork-barrel measures buried in the financial rescue package had been contained in a bill that previously passed the Senate, but died in the House.
The Congressional Budget Office said the package of breaks - including obvious pork and some more defensible tax-relief measures - will add about $112 billion to budget deficits over the next five years because the bill doesn't contain enough offsetting revenue hikes to keep the budget balanced.
The legislative lard annoyed Tom Schatz, president of the watchdog group Citizens Against Government Waste.
"There's always something that goes on at the end where the last dozen members are trying to get something for themselves or for a special interest rather than what might be good for the country," Schatz said.
Some of the other measures added to win approval include a $3.8 billion health-care provision that forces insurance companies to provide coverage for mental-health treatment equivalent to the coverage they provide for physical illness.
Other add-ons will increase individual tax credits and help shield more than 20 million Americans from the painful alternative minimum tax, and offer breaks for businesses that invest in alternative fuels.
Also, several federal income-tax breaks due to expire will now be extended through 2009.
''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''
Top 10 Tax Sweeteners in the Bailout Bill Category: Federal Budget, Headlines By TCS Tag: bailout Pub Date: Oct 02, 2008
The following are some of the top tax sweeteners in the Senate passed Bailout Bill. Not all the provisions are per se outrageous, but collectively are intended to help Congressional leadership get final passage of the 2008 Emergency Economic Stabilization Act.
Sec. 503. Exemption from excise tax for certain wooden arrows designed for use by children Current law places an excise tax of 39 cents on the first sale by the manufacturer, producer, or importer of any shaft of a type used to produce certain types of arrows. This proposal would exempt from the excise tax any shaft consisting of all natural wood with no laminations or artificial means to enhance the spine of the shaft used in the manufacture of an arrow that measures 5/16 of an inch or less and is unsuited for use with a bow with a peak draw weight of 30 pounds or more. The proposal is effective for shafts first sold after the date of enactment. The estimated cost of the proposal is $2 million over ten years, according to the Joint Committee on Taxation.
The Oregon senators were the initial sponsors of the provisions. According to Bloomberg News, the provision would be worth $200,000 to Rose City Archery in Myrtle Point, Oregon.
Sec. 317. Seven-year cost recovery period for motorsports racing track facility Track owners want to be able write-off the cost of their facilities on their taxes over seven years - a depreciation timetable many of them have used for decades. But the IRS has wanted to stretch it to at least 15 years and has raised questions whether the increasingly popular tracks really belong in the same tax category as amusement parks.
Auto track owners are simply trying to get out of paying more taxes - which they'd have to do if they deducted less every year. These owners have gotten plenty of tax breaks over the years from states and localities eager to get speedways. The provision would be extended 2 years till the end of 2009 and would cost $100 million. The provision encompasses all facilities including grandstands, parking lots and concession stands.
Sec. 308. Increase in limit on cover over of rum excise tax to Puerto Rico and the Virgin Islands Extends until December 31, 2009 a rebate against excise taxes charged on rum imported from Puerto Rico and the Virgin Islands. A $13.50 per proof gallon excise tax is applied to distilled spirits imported to the U.S. Under this provision a $13.25 rebate is returned to PR and the VI, and is retroactive back to January 1, 2008. Permanent law sets the rebate at $10.50 per proof gallon, but the PR and VI provisions have generally been in place since the first Clinton Administration. The most recent extension of the $13.50 rebate expired January 1, 2008. Cost is $192 million.
Sec. 301. Extension and modification of research credit The legislation reestablishes and extends the lucrative tax credit for companies doing research and experimentation in the United States. Companies that have benefited from this provision include Microsoft Corp., Boeing Co., United Technologies Corp., Electronic Data Systems Corp. and Harley-Davidson. The two-year extension is estimated to cost $19 billion.
Sec. 504. Income averaging for amounts received in connection with the Exxon Valdez litigation The bailout bill would give a tax break to Exxon Valdez plaintiffs, allowing them to average out their punitive damages awards over three years rather than suffer a one-time tax hit from the Internal Revenue Service, as well as other provisions. Rep. Don Young (R-AK) is a big supporter of this provision. Cost is estimated at $49 million.
Sec. 601. Secure rural schools and community self-determination program. Secure Rural Schools lead sponsors Reps. DeFazio (D-OR), Bill Sali (R-ID); Sens. Wyden (D-OR), Larry Craig (R-ID), are major boosters of this program that expired in 2006. In 1908 the federal government agreed to share logging revenue from Forest Service land with neighboring communities that could not tax the land because it was federal. As logging declined in the 1990s, the "county payments" program was initiated in 2000 to directly provide federal funding, more than half going to Oregon, to deal with the loss of revenue. The original version of this provision was introduced as a bill in early 2007 and was estimated to cost $2.2 billion when the OR and ID delegations came to agreement. To give the package more heft, Payment In Lieu of Taxes (PILT) was added to the package, bringing the total cost to $3.3 billion. PILT provides more general funding to counties for federal lands located within their borders. Sen. Reid (D-NV) talked about the PILT program being one of the important elements of the package when the Senate passed the bailout bill.
Sec. 201. Deduction for state and local sales taxes Allows residents of states that don’t pay income tax to deduct, from their federal taxes, sales tax paid over the course of the year. States that benefit include Texas, Nevada, Florida, Washington and Wyoming. The bailout bill extends this provision for 2 years at a cost of $3.3 billion.
Sec 502. Provisions related to film and television productions In an effort to keep film and television productions in the U.S, they would be eligible for a tax incentive program. Under this program, the cost of production of qualifying films would be permitted to be immediately expensed -- that is, fully deducted from income for tax purposes -- in the year the expenditures occur. This provision also makes permanent other favorable tax treatments for production. Historically Rep. Diane Watson (D-CA) has been a supporter (dating from its creation in the 2004 corporate tax bill). The cost is estimated at $478 million over 10 years.
Sec. 325. Extension and modification of duty suspension on wool products; wool research fund; wool duty refunds The tariff relief (duty savings) is intended to benefit U.S. worsted wool fabric producers that use imported fibers and yarns as inputs, as well as U.S. tailored clothing manufacturers that use imported fabrics as inputs. This provision was originally introduced as a bill in December 2007 by Reps. Louise Slaughter (D-NY) and Melissa Bean (D-IL). It extends current law provisions until 12/31/14, and in some cases to12/31/15. The 2010 to 2015 cost is estimated to be $148 million.
Sec. 309. Extension of economic development credit for American Samoa This extends by two years a previously approved tax credit, the American Samoa economic development credit. In general, this credit allows certain corporations operating in American Samoa a tax credit. The possessions tax credit allows these corporations to offset a portion of their U.S. tax liability on income earned in American Samoa from active business operations, sales of assets used in a business, or certain investments in American Samoa. The cost is $33 million, according to the Joint Committee on Taxation.
Other Examples: Here are some other interesting provisions
Sec. 201. Inclusion of cellulosic biofuel in bonus depreciation for biomass ethanol plant property Current law allows taxpayers to write-off 50% of the cost of any facility placed in service before January 1, 2013 that produces cellulosic ethanol. This provision expands the types of facilities that may be written-off to include production of other cellulosic biofuels in addition to cellulosic ethanol.
Sec. 211. Transportation fringe benefit to bicycle commuters
Allows employers to provide a benefit to employees for costs associated with bicycle commuting, including purchase and repair of a bicycle, bicycle improvements, and bicycle storage. This provision was proposed in 2007 in the Senate by Sen. Ron Wyden (D-OR) and in the House by Rep. Earl Blumenauer (D-OR). This provision is estimated to cost $10 million.
Sec. 323. Enhanced charitable deductions for contributions of food inventory
Extends by two years, until December 31, 2009, a provision allowing for deductions related to the charitable donation of “apparently wholesome food”—defined as food intended for human consumption that meets all quality and labeling standards imposed by law and regulations even though the food may not be readily marketable. This provision also changes the application of the law as it relates to donations by farmers and ranchers. The cost is $149 million, according to Joint Committee on Taxation.
Sec. 324. Extension of enhanced charitable deduction for contributions of bookinventory
Extends by two years, until December 31, 2009, a tax benefit for the contribution of books to public schools. The provision is worth $49 million.
Sec. 602. Transfer to abandoned mine reclamation fund
Transfers interest earned on money in the abandoned mine reclamation fund to the United Mine Workers of America Combined Benefit Fund, which helps pay health benefits for retired miners and their dependents who worked under collective bargaining agreements that promised lifetime health-care benefits. States with the most miners receiving benefits have historically been Pennsylvania, West Virginia, Kentucky, Virginia, and Ohio. This provision extends existing law to include a $9 million transfer for 2010.
Wild beast displays and contests were beloved spectacles in ancient Rome. They had their roots in gladatorial shows, which in their turn originated in funeral celebrations. Fed by Rome's subjugation of foreign lands and their resouces, exotic animal combats grew in size and splendor with each territorial conquest. They began as a way to entertain and control the populace and to give it a symbolic share in the glory of the state. But as the people got more and more addicted to these exhibitions, politicians had to sponsor them to ensure popular support. Their reputaions came to depend on the games they put on.
that would be the podium stance of "Every american should have the American dream of home ownership."(BOTH PARTIES WERE THERE WITH THEIR DAMN BANNERS)......what they fail to do is give 'good food'......the American dream isn't only about owning a home (as taxes/mandates show)........
As for blame----they can suck it up too.....the only thing the government is worried about is our ability to set economic sanctions based on our 'future' work and purchasing appetites......ieil is going down, the rest of the world future speculators see us getting slow and old which means less consumption.
...you are a product of your environment, your environment is a product of your priorities, your priorities are a product of you......
The replacement of morality and conscience with law produces a deadly paradox.
STOP BEING GOOD DEMOCRATS---STOP BEING GOOD REPUBLICANS--START BEING GOOD AMERICANS
I can't believe how selectively selfish our elected officials are. Our country is in an economic crisis and yet they continue to stick it to the taxpayers by adding on an additional $1B of pork to this bill. I can't believe it! I am beyond livid!
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
Bailout gathers House support Many switching sides; some credit call from Obama BY JULIE HIRSCHFELD DAVIS The Associated Press
WASHINGTON — A wave of House converts jumped aboard the $700 billion financial industry bailout Thursday on the eve of a make-or-break second vote, as lawmakers responded to an awakening among voters to the pain ahead of them if stability isn’t restored to the tottering economy. Black lawmakers said personal calls from Democratic presidential nominee Barack Obama helped switch them from “no” to “yes.” Republicans and Democrats alike said appeals from creditstarved small businessmen and the Senate’s addition of $110 billion in tax breaks had persuaded them to drop their opposition. “I hate it,” but “inaction to me is a greater danger to our country than this bill,” said GOP Rep. Zach Wamp of Tennessee, one of the 133 House Republicans who joined 95 Democrats in rejecting the measure Monday, sending the stock market plummeting. Still, the outcome was far from assured. Votecounters in both parties planned to huddle first thing this morning to compare notes on coming up with the dozen or so supporters needed to reverse the stunning defeat. Lawmakers were agonizing as they decided whether to change course and back the largest government intervention in markets since the Great Depression. “I’m trying desperately to get to ‘yes,’ ” said Rep. Carol Shea-Porter, D-N.H. Fears about an economic downturn sent the Dow Jones industrials down nearly 350 points Thursday, three days after Monday’s historic 778-point drop. The Federal Reserve reported record emergency lending to banks and investment firms, fresh evidence of the credit troubles squeezing the country Obama and his Republican rival, John McCain, phoned reluctant lawmakers for their help. McCain, in Denver, predicted that the bill would pass the House. Rep. John Lewis, D-Ga., told a closed-door meeting of House Democrats that he will support the bill after speaking with Obama about it. Other wavering lawmakers said Obama’s entreaties had swayed them as well. Congressional leaders worked over wayward colleagues wherever they could find them. Rep. Steny Hoyer, the secondranking House Democrat, said there was a “good prospect” of approving the measure but stopped short of predicting passage — or even promising a vote. Nonetheless, a vote was expected today. “I’m going to be pretty confi - dent that we have sufficient votes to pass this before we put it on the floor,” Hoyer said. The top Republican vote-counter, Rep. Roy Blunt of Missouri, did predict that the measure would be approved. “A lot of people are watching,” President Bush pointed out — as if lawmakers needed reminding — and he argued from the White House that the huge rescue measure was the best chance to calm unnerved financial markets and ease the credit crunch. He was calling dozens of lawmakers, a spokesman said.
Bailout may do little to halt foreclosures BY ALAN ZIBEL AND ADRIAN SAINZ The Associated Press
WASHINGTON — The harsh reality for Murielle Montes and hundreds of thousands of homeowners who are behind on their mortgages is this: A $700 billion bailout of the financial industry will probably do little to help them avoid foreclosure. Today, House lawmakers are scheduled to vote on the package, amid intense lobbying from President Bush and industry groups who say the measure is crucial for stabilizing the staggering U.S. economy. But when it comes to foreclosures, the Treasury Department is only directed to “maximize assistance for homeowners” and write up monthly progress reports. That’s not enough to help Montes, a 46-year-old nursing assistant, who faces foreclosure on the house she bought in Brockton, Mass., three years ago. She has been working with a housing counselor to modify her loan since February but hasn’t had any luck and received a foreclosure notice in August. Meanwhile, the value of her house has sunk from her purchase price of $330,000 to $250,000, she said. “Where am I going to sleep? Where are my kids going to go?” asked Montes, who immigrated to the United States from Haiti 20 years ago. The government, she said, “should try to buy the loan out so people can refinance . . . and everyone can stay in their house.” But in many cases, the federal government’s hands could be tied — either because the mortgages are pooled into securities sold in pieces to other investors, or because homeowners don’t have the financial resources to stay in the property. Within 12 to 18 months, roughly 40 percent of U.S. borrowers, or 20 million households, will owe more on their mortgages than their homes are worth, according to Deutsche Bank. The problem will be most severe in California, Nevada, Florida and Arizona, where housing prices soared and reckless lending practices were rampant during the housing boom. That’s almost the same number of American households that are spending 30 percent or more of their income on housing, according to recent U.S. Census data. With little cash cushion or home equity, the slightest financial problem — an increase in gas prices, medical bills or car repair — can put a family behind on their mortgage and into the realm of foreclosure. “Only a small portion of problem loans” can be saved, said Deutsche Bank analyst Karen Weaver. “It doesn’t always work ... In some cases the lender is better off just taking back the property and just selling it.” As lawmakers debate the massive rescue plan, many consumer advocates are upset that it would benefit the same Wall Street banks that provided funding for the explosion of subprime and other exotic loans, while making only vague promises to assist homeowners. “It has been very difficult to get [the government] to put together a mandatory, comprehensive, immediate plan to rescue homeowners in the same way that they’ve put together a massive plan to rescue those who got us in this crisis in the first place,” said John Taylor, president of the National Community Reinvestment Coalition, a consumer group in Washington. Even if the government does push aggressive efforts to modify troubled loans, it could take months to put such a sweeping effort in place. Still, some housing advocates believe borrowers will have better luck with the government than with private mortgage investors. “I would expect the government would be an easier entity to negotiate with than the current lenders who are trying at all costs not to take a loss,” said Mossik Hacobian, executive director of Urban Edge Housing Corp. in Boston, which has been trying to help Montes with her mortgage. The government may well step up pressure on loan servicers — which collect and distribute loan payments — to make changes in loan terms such as reduced interest rates or lowered principal balances, said Credit Suisse analyst Rod Dubitsky. But while the government would be the largest investor in mortgage securities, “they can’t dictate anything” unless they buy whole loans, instead of slices of mortgage securities, Dubitsky said. Many in Washington and on Wall Street are hoping the rescue package will make more money available for mortgage lending, lower interest rates and make it easier for borrowers to qualify. This might help put a floor under falling home prices — which are down more than 16 percent nationally from a year ago — and lessen the severity of the economic downturn. That would be welcome news for Rick Wendell, a 41-year-old electrician in Orlando, Fla. He and his wife are looking to rent out a room in their three-bedroom house. They are struggling to pay their $1,950 mortgage and property taxes because his wife lost her job earlier this year. The Wendells bought their house 18 months ago for $245,000, but think it has dropped in value by at least $25,000. “Unfortunately for me, I’m stuck with a house at a high price,” he said. “The people who have already purchased a home are stuck,” he said, noting that a federal bailout “might stimulate the economy, and my wife might be able to find a job.” Consumer groups say the lending industry was ill-prepared for a sharp rise in foreclosures. And they blast the industry for relying on short-term repayment plans, which aim to help borrowers get back on track after missing a few payments, rather than reducing the principal balance or lowering the interest rate. The Hope Now alliance, a Bush administration-backed mortgage industry group, said Thursday that the industry has performed some form of workout on 2.3 million loans since July 2007. About one-third of those were permanent modifications. But on Monday, a group of state banking and law enforcement officials released a report that said nearly 80 percent of borrowers with subprime loans were not on track for assistance to avoid foreclosure as of May. Paul Koches, general counsel of subprime mortgage servicer Ocwen Financial Corp., said a loan modification benefits both the borrower and the lender because losses on foreclosed homes are running at more than $100,000 per property. “It sure beats the alternative,” Koches said. Nevertheless, the level of loan modifi cations varies dramatically in the industry, according to a Credit Suisse report released this week. Among 18 loan servicers, modification rates among subprime loans made since 2005 ranged from under 2 percent to nearly 18 percent as of August, according to the Credit Suisse report. Ocwen Financial had the third-highest level of loan modifi cations in the Credit Suisse report.
By JULIE HIRSCHFELD DAVIS and DAVID ESPO, Associated Press
With the economy on the brink and elections looming, Congress approved an unprecedented $700 billion government bailout of the battered financial industry on Friday and sent it to President Bush for his certain signature.
The final vote, 263-171 in the House, capped two weeks of tumult in Congress and on Wall Street, punctuated by daily warnings that the country confronted the gravest economic crisis since the Great Depression if lawmakers failed to act.
Bush was poised to make a statement on the historic vote.
"We all know that we are in the midst of a financial crisis," House Republican Leader John Boehner of Ohio, said shortly before casting his vote for government intervention in private capital markets that was unthinkable only a month ago.
"And we know that if we do nothing, this crisis is likely to worsen and to put us into an economic slump like most of us have never seen."
Speaker Nancy Pelosi, D-Calif., said the bill was needed to "Begin to shape the financial stability of our country and the economic security of our people."
Stocks were up on Wall Street, where there was a lot of anticipation of the vote but where investors also were buffeted by a bad report on the job market. The Labor Department said employers slashed 159,000 jobs in September, the largest cut in five years and further evidence of a sinking economy.
Even before the measure cleared Congress, the White House sought to dampen optimism of its immediate impact on the economy. "This legislation is to fix a problem in our financial markets," said spokesman Tony Fratto. "It's not sold as giving a boost to the economy, but rather preventing a crisis in our economy... If it works as we hope it will, credit will be able to begin flowing again."
The House vote marked a sharp change from Monday, when an earlier measure was sent down to defeat, largely at the hands of angry conservative Republicans.
Senate leaders quickly took custody of the measure, adding on $110 billion in tax and spending provisions designed to attract additional support, then grafting on legislation mandating broader mental health coverage in the insurance industry. The revised measure won Senate approval Wednesday night, 74-25, setting up a furious round of lobbying in the House as the administration, congressional leaders, the major party presidential candidates and outside groups joined forces behind the measure.
Logged
il is going down, the rest of the world future speculators see us getting slow and old which means less consumption.
