Clinton proposes Greenspan lead foreclosure group
WHITE PLAINS, New York (Reuters) - Former Federal Reserve Chairman Alan Greenspan and other economic experts should determine whether the U.S. government needs to buy up homes to stem the country's housing crisis, Democratic presidential candidate Hillary Clinton will propose on Monday.
Clinton, a presidential candidate and senator from New York, said the Federal Housing Administration should "stand ready" to buy, restructure and resell failed mortgages to strengthen the ailing U.S. economy.
"Just as it has in the past, this kind of temporary measure by the government could give our economy the boost it needs and families the help they need," Clinton will say, according to excerpts of remarks prepared for a speech in Philadelphia.
"It would not require a single new government bureaucracy, and would be designed to be self-financing over time -- so it would cost taxpayers nothing in the long run."
Clinton threw her weight behind legislation proposed by Democrats Rep. Barney Frank of Massachusetts and Senator Chris Dodd of Connecticut that would "expand the government's capacity to stand behind mortgages that are reworked on affordable terms."
But she said a bipartisan group should determine whether that approach was sufficient or whether the U.S. government should step in as a temporary purchaser.
The working group could be led by bipartisan economic heavyweights such as Republican Greenspan, Democratic former Fed Chairman Paul Volcker and Robert Rubin, the treasury secretary under President Bill Clinton.
Under the Frank plan, the government would take failing mortgages off the hands of investors and write new terms that would prevent foreclosure. It would see lenders write down the mortgage amount in exchange for a government guarantee.
The former first lady has argued her experience makes her a stronger candidate than rival Barack Obama, a senator from Illinois, to steer the economy.
A focus on the housing crisis also appeals to the working class constituency that has been a big part of her support base. Clinton proposed last week that a new economic stimulus package be created to focus on the housing slump.
The proposal included a $30 billion emergency housing fund to put cash in the hands of local governments and nonprofit organizations to buy and resell properties to low-income people or turn them into affordable rental housing units.
Clinton proposes Greenspan lead foreclosure group | Reuters
Oh great! NOW the government thinks that they can get into the real estate market? I'm just SURE there are plenty of "low income" families out there that can afford a $200,000 mortgage. :wtf:
Have a good one!:s4:
Clinton proposes Greenspan lead foreclosure group
Quote:
Originally Posted by Psycho4Bud
Oh great! NOW the government thinks that they can get into the real estate market?
They do.. Its usually goes by the name "asset forfeiture" or "eminent domain"
So she wants to give out funds to buy foreclosed homes, then to turn around and resell for cost or profit?
Quote:
"It would not require a single new government bureaucracy, and would be designed to be self-financing over time -- so it would cost taxpayers nothing in the long run."
Who will be buying these houses? The same people being foreclosed on? I think these people need to take a lesson from Ron Paul. Cutting or eliminating the federal tax burden would help more Americans struggling to get by then taxing them to pay for crap like this.
Clinton proposes Greenspan lead foreclosure group
Quote:
Originally Posted by Zimzum
They do.. Its usually goes by the name "asset forfeiture" or "eminent domain"
So she wants to give out funds to buy foreclosed homes, then to turn around and resell for cost or profit?
Who will be buying these houses? The same people being foreclosed on? I think these people need to take a lesson from Ron Paul. Cutting or eliminating the federal tax burden would help more Americans struggling to get by then taxing them to pay for crap like this.
At the cost of turning entire neighborhoods into ghettos? This program is to prevent blighted neighborhoods. A house or two lost in the neighborhood is no big deal, but when the number of foreclosures per neighborhood increases, the chances of crime coming in goes up. You'll have bums start to live in those houses and before you know it, it becomes an unsafe neighborhood. The buyers in those programs are not the same people that bought these houses. They are the rental population, people recently starting a family looking for a good deal on the market. I'm currently looking for a foreclosed home.
This is hardly the start of where the tax burden needs to be cut. Start with the military industrial complex, followed by making the requirements more stringent to acquire social services, cutting some programs all together. A move that'll stimulate the economy shouldn't be one of them.
Clinton proposes Greenspan lead foreclosure group
Quote:
Originally Posted by Psycho4Bud
Oh great! NOW the government thinks that they can get into the real estate market? I'm just SURE there are plenty of "low income" families out there that can afford a $200,000 mortgage. :wtf:
Have a good one!:s4:
Yeah, I may be with you on this one. I'm not sure exactly what they are talking about here. It sounds like they are talking about the banks writing down the principal in exchange for a loan guarantee, in which case that might work. But the loan would need to be qualified and underwritten somehow, otherwise we taxpayers could be left holding the bag if it went bad again. Most of these loans were not properly qualified in the first place, so unless it were properly qualified before being written down and guaranteed by the government, there's nothing to say the borrower wouldn't just end up defaulting again. I think I could only support this if it had a defined budget and some method of requalifying the loans.
As to your comment about the $200,000 mortgage --- there are no homes to be had at anywhere near that price by low income, high income, or anyone else anywhere near the Bay Area. That's part of how this mess got started, the high price of housing. Even after the price meltdown and foreclosure mess, you can check an MLS listing that covers an area of hundreds of square miles, including over 10 million homes, find thousands on the market, and nothing for less than $300,000. My nephew recently bought an older 2-bedroom condo, nothing special, believe me, for $330,000. A block away from where I live, a fixer upper 3-bedroom with foundation damage was foreclosed upon more than a year ago --- it finally sold for more than $100,000 off the asking price, which was already reduced $100,000 off its peak, and it sold for about $450,000. This is a 3-bedroom house in what you would definitely think was a working-class neighborhood from the looks of it. And it still takes a fortune to buy into the area.
I don't fully understand how this kind of distortion got into the housing market, but there has definitely been something wrong. My feeling is that it was a financing bubble more than a housing price bubble. Lenders were willing to make these kinds of loans to people who really didn't qualify, and that ease of credit drove the prices out of all proportion. Now the shit has hit the fan, and teh whole economy is suffering.
The borrowers should have been better educated before signing onto these outrageous loans and buying properties for outrageous prices, so they bear some responsibility. But whoever was underwriting these loans was committing some kind of fraud, and they should have to pay for a big chunk of this disaster. If that means the lenders have to write down the principle on these loans to get back into an afordable range for the borrowers they shouldn't have underwritten in then first place, then that's the price they have to pay for being sloppy about their business and dragging down the whole economy with their greed.
