Misblog

Originally Published March 13, 2008; Updated and Republished August 27, 2008; Updated and Republished September 05, 2008; Updated and Republished September 21, 2008; Updated and Republished October 07, 2008; Updated and Republished on October 23, 2008; Updated and Republished on November 11, 2008; Updated and Republished on November 23, 2008; Updated and Republished on December 04, 2008; Updated and Republished on December 09, 2008; Updated and Republished on December 21, 2008; Updated and Republished on December 23, 2008; Updated and Republished on December 28, 2008; Updated and Republished on December 30, 2008:

Bush senate Republicans in Congress have stall legislation1 aimed at helping those caught in the mortgage crisis retain their homes—Homeless Los Angelinos and others are building tent cities. These same senators while stalling legislation aimed at helping Americans stay in their home continue sending trillions of dollars to Iraq!

Perhaps Senator Mitch McConnell, and other Bush Republicans will explain how it is that Americans are homeless while they send trillions of dollars to Iraq?

Web:

• UPDATED 12/30/2008 BBC, US housing index in record slump.

  "House prices in 20 US cities fell by a record annual rate of 18.04% in October, according to a closely-watched home price survey."--BBC--

• UPDATED 12/28/2008 Reuters, How one family's mortgage is linked to meltdown
  
  It's important for the Goldricks and others to write their representatives—not to give up.

  While current tax and bankruptcy laws/regulation impede modification of certain "securitized" investments these laws are easily modified. The problem is everyone is praying (including Congress) that housing prices will somehow magically increase as more homeowners continue cascading into a decade of disaster (losing your home is just the beginning)!

  Goldrick Family

• UPDATED 12/23/2008 NYT, Home Sales in November Fell at Faster Pace Than Expected.

  "The median price of a home fell 13 percent in November, to $181,300 from $208,000 a year ago."--NYT--

  It seems preferable to ensure home prices at all times reflect their actual economic value. As opposed to economic shocks caused by war, fraud, unregulated and unsustainable economic growth, unregulated and unsupervised lending practices, and incompetence etc.

  It does not seem at all complex or sophisticated to enable a relatively few gamblers (hedge funds) and warmongers to overheat an economy, and then exit when it becomes unsustainable.

  Leaving others to clean up the shit pile while denying responsibility for the shit pile to anybody who will listen!

• UPDATED 12/21/2008 NYT, The Wrecking Reckoning: White House Philosophy Stoked Mortgage Bonfire.
• UPDATED 12/09/2008 BBC, US faces deep problems, OECD says
• UPDATED 12/04/2008 NYT, Washington’s New Tack: Helping Homeowners
• UPDATED 12/04/2008 WP, Fed Chair Calls for Additional Steps to Stem Foreclosures
• UPDATED 11/24/2008 AP, More housing aid sought as prices sink further
• UPDATED 11/23/2008 BBC, Citigroup seeks 'emergency cash'

• UPDATED 11/11/2008 AP, Gov't to announce new loan aid effort. This is mostly meaningless tinkering around the edges—Congress must simply enable primary residence homeowners to restructure and write-down their mortgage in bankruptcy.

  The bankruptcy process can objectively and smoothly handle the many millions of mortgages requiring restructuring, including determinations of feasibility, lender notification, and interested party participation (guarantee those "hard to reach lenders" we keep hearing about will suddenly be very reachable).

  Congress must make clear that bankruptcies filed for the sole purpose of mortgage restructure and write-down cannot be used for purposes of judging credit worthiness.

  Additionally, Congress must make clear that any and all gains related to any fraudulent mortgage lending practice can be trace and recovered, notwithstanding corporate structure or commingling of funds.

• UPDATED 10/23/2008 AP, US foreclosure filings up 71 percent in 3Q

  "RealtyTrac monitors default notices, auction sale notices and bank repossessions. More than 250,000 properties were repossessed by lenders nationwide in the third quarter, 81,000 of which were taken back last month"--AP--

  Dislocation and other collateral costs related to a foreclosure can ripple through the economy, sometimes for decades.

  Amending the bankruptcy laws to enable primary home owners to write down and restructure their mortgage can minimize some of these costs.

• UPDATED 10/07/2008 Google->AP, Bank of America settles lawsuit over bad mortgages.
  This multi-billion dollar settlement responds to lawsuits filed by California's Attorney General among others. Only Countrywide borrowers' mortgages will be adjusted (not necessarily written down to current market value), leaving other borrowers to fend for themselves.

  Congress must modify bankruptcy law to enable all homeowners to "write down" the mortgage on their primary residence.

• UPDATED 09/24/2008 White House, Text of President's Address to the Nation, Bailout
• UPDATED 09/21/2008 AFP, Paulson calls on US Congress to move quickly on rescue
  
  • UPDATED 09/21/2008 NYT, Democrats Begin to Set Own Bailout Terms

  • UPDATED 09/21/2008 WP, Obama Says Bailout Must Also Assist Homeowners

    "in return for their support, the American people must be assured that the deal reflects the basic principles of transparency and fairness and reform."--Barack Obama--

• UPDATED 09/05/2008 NYT, U.S. Rescue Seen at Hand for 2 Mortgage Giants. NYT is reporting the United States is getting ready to de-privatize (i.e. nationalize) Fannie Mae and Freddie Mac, with your tax dollars.

  The bail-outs looting just gets bolder, bigger, and more brazened—the looters calling those they're looting, whiners!

  Neo-capitalism: Privatize on the upside; nationalize on the downside.

  It is worth noting that a simple amendment to the Title 11 (United States Bankruptcy Code) enabling primary residence home owners to "write-down" their mortgages to current fair market value would immediately stop this looting.²

• UPDATED 09/05/2008 Reuters, Home foreclosures reach record high
• UPDATED 08/27/2008 UPI, Official seeks foreclosure moratorium San Diego's city attorney seeks relief from the county's 213 percent increase in mortgage foreclosures.
• UPDATE 03/13/2008 Forbes, Paulson's New Anti-Crisis Playbook."Poor judgment and poor market practices led to mistakes by all participants.”—Oh, you mean like the 1998 collapse of Long Term Capital Management or today's collapse of Carlyle Capital.
• BBC Video Clip, The new homeless in the United States
• Senate Democrats Discuss Republicans' Refusal To Help Americans At Risk Of Losing Their Homes

-----notes-----

1. Foreclosure Prevention Act of 2008, (S.2636)

2. The amendment would also make it less likely that these mortgage scam losses will be shifted to the taxpayers (and primary residence home owner) in the future.

Of course lenders worldwide will not appreciate shifting the loss on their "the sky's the limit" scams—but how is that a negative? Careful before you respond it will tighten the capital markets!