Business as usual in Washington.
I have been ranting on this blog for almost a year now on why our government needs to step in and demand action from lenders and servicers to do more to help clean up the toxic mortgages that are eating up our country one home, one family and one city at a time.
Barney Frank had this to say to the Mortgage Bankers Association:
“If this program, this set of inducements, for people to avoid foreclosure doesn’t make much difference, what you will face next year … will be much tougher rules about the home mortgage industry in general,” he said at a Mortgage Bankers Association meeting in Boston.
The bill that Frank is pushing would expand refinancings of risky mortgages by requiring voluntary lender write-downs. This would enable the government to finance $300 billion in distressed mortgages into FHA loans to help two million homeowners avoid foreclosure.
According to Frank, a Massachusetts Democrat, the new FHA program could cost the government up to $6 billion. Analysts at Citigroup calculated the Frank proposal could cost the government as much as $20 billion, but profits may reach $31 billion if homeowners do not re-default past expectations.
It looks like President Bush and his glorious administration are adamantly against the bill and plan to veto it.
On Wednesday morning, President Bush, speaking after a meeting with House Republican leaders, said the bill was too costly.
“We are committed to a good housing bill that will help folks stay in their house, as opposed to a housing bill that will reward speculators and lenders,” the president said.
The administration, in a statement Tuesday evening, called the bill “overly burdensome and prescriptive” and said it would “force” the Federal Housing Administration and taxpayers “to take on excessive risk.”
The MBA had this to say:
I think lenders are going to (participate) but with what’s consistent with their fiduciary obligations,” Steve O’Connor, the MBA’s senior vice president of government affairs, told reporters after Frank’s address.
In other words, they are going to keep playing their game because they make the rules and will do it according to the contracts that they made. So, in other words, it looks like we are still in the same sinking boat that we were in before.
Grab your foreclosure life jackets, because it looks like were still in for a wild ride that isn’t going to end anytime soon.
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The treasury secretary appears to be ready to compromise on the bill. It still seems like something will pass.
Call/email the White House to provide support for the veto:
http://patrick.net/housing/contrib/whitehouse.html