39 Republicans Join Democrats As Mortgage Bill Passes House

Dankdude · #1 05-09-2008, 04:56 PM

By Lori Montgomery
Washington Post Staff Writer
Friday, May 9, 2008; Page A01

The House yesterday approved an ambitious plan to rescue hundreds of thousands of homeowners at risk of foreclosure by helping them trade exotic loans with rapidly rising monthly payments for more affordable mortgages backed by the federal government.

Bucking a White House veto threat, 39 Republicans joined Democrats in supporting the bill, the centerpiece of a broader housing package that represents Washington's most aggressive response to the nation's housing crisis. The measure aims to unfreeze mortgage markets by expanding the Federal Housing Administration's reach and strengthening mortgage giants Fannie Mae and Freddie Mac. It also would create a $7,500 tax credit for first-time home buyers to try to boost sales and slow plummeting home prices.

GOP House leaders blasted the bill as a bailout for speculators and irresponsible borrowers. But the measure, sponsored by House Financial Services Committee Chairman Barney Frank (D-Mass.), gained strong support from rank-and-file Republicans worried that escalating foreclosures are ruining lives and decimating neighborhoods.

Despite President Bush's condemnation of the bill this week, White House officials seemed to leave the door open to negotiation. And key Republicans are working with Democrats on a similar plan in the Senate.

"People are in a world of hurt. My sense is there's maneuvering room," said Rep. Fred Upton (R-Mich.), whose state has been among those hardest hit. "There's still a good chance they'll get a bill the president can sign, knowing that a lot of the country needs help."

More than 1.2 million homes are in foreclosure, and an additional 3 million are forecast to join them over the next two years. Home prices have fallen more than 10 percent, and state and local tax collections are suffering. Polls show the economy is the top concern among voters, with one in four respondents saying they have been directly affected by problems in the housing market.

The borrowers most at risk of foreclosure -- and who have drawn policymakers' attention -- are those who have fallen behind on their mortgage payments but cannot sell or refinance because the value of their homes has fallen so far that they owe more than their homes are worth.

The Bush administration has tried to help such borrowers by urging banks to reduce their mortgage debt. The administration also has eased eligibility standards so borrowers who have missed a few payments can qualify for cheaper loans insured by the federal government through the FHA. But those initiatives have helped relatively few families.

Frank's proposal calls for the FHA to respond more aggressively, by offering to insure mortgages for even the least creditworthy borrowers if their banks will forgive a portion of the debt and help them stay in their homes. Under the proposal, lenders would have to take a significant loss, permitting borrowers to pay their original loans with new loans worth no more than 90 percent of their homes' new, lower value. Extra fees charged by the FHA would lower the payoff to lenders to 85 percent of a home's current value.

Borrowers would get lower monthly payments and an immediate equity stake in their property. If home values rise, the plan requires homeowners to share their profits with the federal government when they sell or refinance.

The Congressional Budget Office estimates that as many as 500,000 homeowners will benefit from the program. But more than a third of those borrowers are likely to default, the CBO estimates, forcing the FHA to pay off their loans and take possession of their property at a cost to taxpayers of $1.7 billion.

The White House has balked at that price tag, calling Frank's bill an "attempt to shift costs to taxpayers [that] constitutes a bailout." But there are signs that the administration is open to compromise.

In a speech Monday, Federal Reserve Chairman Ben S. Bernanke appeared to endorse Frank's plan. Treasury Secretary Henry M. Paulson Jr. and other administration officials have spoken favorably of it. On Wednesday, even as Bush declared his intention to veto the measure, one of his top economic advisers told the Wall Street Journal that differences between the White House and congressional Democrats were not "insurmountable."

Yesterday, White House spokesman Tony Fratto said Bush supports the concept of Frank's plan. "As a basic concept, it's what we're already doing. But it's what we're doing on steroids," he said.

"Is it possible to have additional housing legislation? Yes, it's possible. And maybe the Frank bill could change so much that there could be legislation we could accept," Fratto said. "But I think we're far away from that."

In House debate, many Republicans echoed the administration's concerns. Minority Leader John A. Boehner (Ohio) said Frank's bill would "bail out scam artists and those who were speculating in the market, and they want taxpayers to pick up the tab."

But other Republicans cringed at the indictment of troubled borrowers and said they were disappointed by the veto threat.

"What's offensive is some of the rhetoric," said Rep. Steven C. LaTourette (R-Ohio), who voted for the measure. "They say it rewards speculators. No, it doesn't. It's limited to homeowners. They say it's a $300 billion bailout. No, it's not. It costs $1.7 billion."

"Would I have written the bill the way Chairman Frank did? No, but we're not in charge anymore," LaTourette said. The housing mess "calls for some bold action. People are expecting us to do something."

The House voted 266 to 154 to approve Frank's rescue plan and a broad array of other housing initiatives. The House also voted 322 to 94 to approve an $11 billion package of housing tax measures, including the $7,500 credit for first-time buyers who purchase a home this year. Under the measure, the credit would have to be repaid to the government over 15 years.

The package moves to the Senate, where Banking Committee Chairman Christopher J. Dodd (D-Conn.) and the committee's senior Republican, Richard C. Shelby of Alabama, are working on a similar proposal. Senate Republicans have been more resistant than their House counterparts to broad plans to intervene on behalf of distressed homeowners.

But Francis Creighton, vice president for government affairs at the Mortgage Bankers Association who is working with both the administration and Congress to slow the rate of foreclosures, said he expects a compromise to be reached.

"We believe the administration is as committed to addressing this situation in the market as anybody. There's still a lot of time for negotiation," Creighton said. "Everyone wants to support something that can fix the housing crisis."

ViRedd · #2 05-09-2008, 05:28 PM

"It also would create a $7,500 tax credit for first-time home buyers to try to boost sales and slow plummeting home prices."

This is exactly what we don't need. This is nothing more than government trying to create an artificial demand. The market is going through a correction that must be played out in order for a normal market to resurface. Again, here we have government stepping into areas where they have no constitutional authority. The results will be an even deeper correction in the market at a later date.

Vi

Dankdude · #3 05-09-2008, 05:35 PM

constitutionally as long as there is a 2/3 majority the government can pass any bill that it wants...

ViRedd · #4 05-09-2008, 05:36 PM

Quote:

Originally Posted by Dankdude

constitutionally as long as there is a 2/3 majority the government can pass any bill that it wants...

So, if 2/3 votes to disarm the American people, that's OK with you?

Vi

ViRedd · #5 05-09-2008, 05:40 PM

From the Libertarian Party website:

From LP.org

Press Releases
Keep the housing market a free market

Washington, D.C. - In a statement issued today by Libertarian Party National Media Coordinator Andrew Davis, the Libertarian Party is urging the President to veto any housing bill sent to his desk that creates bailouts for the housing industry at the taxpayers' expense:

"Republicans and Democrats have come together to create a bipartisan measure that puts the American taxpayer on the line for risky loans and poor decisions. No person should be asked to pay for his neighbor's foolish choice to take on a mortgage he couldn't afford, or for a lender that makes a risky loan. What happened to individual responsibility? President Bush should veto any sort of legislation that seeks to manipulate the housing market with taxpayer-subsidized bailouts, or any sort of bill that prevents buyers and lenders from taking responsibility for their decisions. The housing market should be a free market, where everybody faces the responsibility for the decisions they make without hanging the taxpayer out to dry. A second mortgage should not mean helping to take on your neighbor's."

The Libertarian Party is America's third largest political party, founded in 1971 as an alternative to the two main political parties. You can find more information on the Libertarian Party by visiting Official Website of the Libertarian National Committee. The Libertarian Party proudly stands for smaller government, lower taxes and more freedom.

For more information on this issue, or to arrange a media interview, please call Andrew Davis at (202) 333-0008 during normal business hours, or at (202) 731-0002 during any other time.

© Copyright 2006 National Libertarian Party

Dankdude · #6 05-09-2008, 05:52 PM

Just because the Government is for once doing something that is going to benefit the people (and not the corporations) you say it's unconstitutional.
Who the fuck are you to make policy?
If it weren't for unscrupulous lenders in the first place and people like you who had to make a commission selling houses to people that can not afford them we wouldn't be in this mess.
Besides you need to go and read the Patriot Act, it already has the gun grabbing provision in it. It was "so called" conservatives who pushed it forward.
All you are worried about is that it will get into your pocket book.

Dankdude · #7 05-09-2008, 05:55 PM

Quote:

Originally Posted by ViRedd

From the Libertarian Party website:

From LP.org

Press Releases
Keep the housing market a free market

Washington, D.C. - In a statement issued today by Libertarian Party National Media Coordinator Andrew Davis, the Libertarian Party is urging the President to veto any housing bill sent to his desk that creates bailouts for the housing industry at the taxpayers' expense:

"Republicans and Democrats have come together to create a bipartisan measure that puts the American taxpayer on the line for risky loans and poor decisions. No person should be asked to pay for his neighbor's foolish choice to take on a mortgage he couldn't afford, or for a lender that makes a risky loan. What happened to individual responsibility? President Bush should veto any sort of legislation that seeks to manipulate the housing market with taxpayer-subsidized bailouts, or any sort of bill that prevents buyers and lenders from taking responsibility for their decisions. The housing market should be a free market, where everybody faces the responsibility for the decisions they make without hanging the taxpayer out to dry. A second mortgage should not mean helping to take on your neighbor's."

The Libertarian Party is America's third largest political party, founded in 1971 as an alternative to the two main political parties. You can find more information on the Libertarian Party by visiting Official Website of the Libertarian National Committee. The Libertarian Party proudly stands for smaller government, lower taxes and more freedom.

For more information on this issue, or to arrange a media interview, please call Andrew Davis at (202) 333-0008 during normal business hours, or at (202) 731-0002 during any other time.

© Copyright 2006 National Libertarian Party

Don't you love the party of Corporate Supremacy?

Also the Libertarians stand a snowball's chance in hell of ever getting into office, thus irrelevant.

ViRedd · #8 05-10-2008, 02:59 PM

Quote:

Originally Posted by Dankdude

1. Just because the Government is for once doing something that is going to benefit the people (and not the corporations) you say it's unconstitutional.

2. Who the fuck are you to make policy?

If it weren't for unscrupulous lenders in the first place 3. and people like you who had to make a commission selling houses to people that can not afford them we wouldn't be in this mess.
Besides you need to go and read the Patriot Act, it already has the gun grabbing provision in it. 4. It was "so called" conservatives who pushed it forward.

5. All you are worried about is that it will get into your pocket book.

Is there an echo in here?

1. This benefit you say is coming from the government ... at who's expense?

2. Me? Make policy? Are you deluded?

3. I have to plead innocent on all counts, Dank. Not one of my sales EVER has ended up in foreclosure.

4. Again, you are confusing Republicans with Conservatives.

5. On the contrary, Dank. What I worry the most about is loss of our liberties, and financial liberty is one of them.

6. Is there anything else you would like to say?

Vi

VTXDave · #9 05-10-2008, 05:51 PM

Quote:

Originally Posted by Dankdude

If it weren't for unscrupulous lenders in the first place and people like you who had to make a commission selling houses to people that can not afford them we wouldn't be in this mess.

Doesn't the final responsibility lie in the hand(s) of the buyer(s)? Anybody, IMO, with any sense would first look at their budget to determine if the house they're buying is beyond their financial capability, yes? Nobody held a gun to their head and made them sign the loan docs. I am fully aware that there are unscrupulous lenders offering "less than ideal" loans, but the onus lies on the buyer as to whether they want to enter into one of these loans or not.

ViRedd · #10 05-10-2008, 06:23 PM

Exactly right, Dave.

Investment used to mean "Heads I win, tails I lose." Now, unfortunately, with the entitlement mentality of modern Americans, its "Heads I win, tails the taxpayer loses."

Vi