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Home Front: Politix

Schumer proposes blowing $300m to bail out subprime mortgages

2007-05-04

Community groups that help subprime borrowers try to save their homes from foreclosure would receive $300 million in aid under legislation introduced on Thursday. The infusion of federal money would help consumer groups reach out to troubled borrowers and, in some cases, provide new financing directly.

The groups that would benefit from the money are in direct contact with delinquent homeowners and guide them through the complicated steps they can take to save their homes, said Sen. Charles Schumer, chairman of a Senate subcommittee on housing and sponsor of the legislation. "They know how to do it. Their role is critical," he said of the consumer groups that aim to help troubled borrowers. "We've learned that borrowers who are delinquent on their loans are at a distinct disadvantage," when trying to change the terms of a bad loan, the New York Democrat said.

Chuckie should get the 'Master of the Obvious' lifetime achievement award for that one.

Schumer's legislation is the first proposal from federal lawmakers aimed at alleviating the crisis in the subprime mortgage market that serves borrowers with damaged credit. Schumer's legislation also would give mortgage brokers, lenders and investors greater responsibility for loans that go bad. Lenders would be accountable for their brokers who use fraudulent means to sell loans, and investors might have to pay if the mortgages they own were offered to borrowers who were not fit to make the payments.

Posted by:Fred

#16 What ever happened to "Buyer beware"?

If it looks too good and smells too good and you still bite - then you just failed your Darwin test and should be removed from that niche.

It is against GAIA's will (something the nutty left can grasp) to save a failed herd animal. It makes the whole heard weak. That's what the lions and stuff are for - THEY KEEP THE HERD HEALTHY.

NOW THIS BOZO WANTS TO KEEP IT SICK.

Posted by: 3dc 2007-05-04 22:23

#15 Two words: moral hazard. Unfortunately Squiggy Schumer doesn't understand the meaning of either word.

Posted by: regular joe 2007-05-04 21:19

#14 Europe doesn't deduct HELOCs.

This is 1 item from that committee W put together.

Besides, why should 2nd houses be eligible?

Posted by: anonymous2u 2007-05-04 11:01

#13 This is just the start. One of the things that Ronald Reagan blew was bailing out the failed Savings and Loans in the 80s. The American people assumed to liability and the government turned around and sold the assets at below bargain basement prices to the banking industry. Meanwhile the banks continued to fill their executive salaries and inhouse trading profits by rigging the credit interest levels multiple times above the prime rate. They knew that sitting on the now unencumbered property, that eventually the market would catch up and they'd make an even greater killing, which they did.

Watch as both parties now sell us out again to the same people. We're going to get stuck with the debt and the usual suspects will come off with the capital. Of course it will all be phrased as being in our own long term interest.

When you gamble at Vegas and owe the bank 10 grand they have you by the balls. When you play the property speculation market and owe the banks 10 billion, you have them by the balls. They just turn around to their agents in Congress and arrange it so that, once again, they have everyone by the balls.

Posted by: Procopius2k 2007-05-04 09:20

#12 Fannie Mae wipes its a$$ with $300M.

Just as long as they're using one square at a time...

Posted by: Sheryl Crow 2007-05-04 08:33

#11 (Lets not give the spambots any more ideas...)

Posted by: Seafarious 2007-05-04 07:50

#10 I bet "M" and "eds" also doesn't fly...

Posted by: Frank G 2007-05-04 07:45

#9 Ah. Fred's comment checker doesn't like the word that begins with "M' and ends with "ortgage".

Posted by: Seafarious 2007-05-04 07:37

#8 The cynic in me figgers there will be a price to pay for this bailout; namely, Congresscritters can count and they know how much tax revenue is sheltered (heh) by the home loan interest deduction (hint: it's a LOT). They prolly can't grab it directly without a total middle-class riot, since that's basically the only tax shelter us proles can "afford".

BUT, perhaps with enough grieving immigrant widows, sympathetic single moms who took in their sister's kids too, and kindly old folks who want to leave a home to their grandkiddies, all of whom trusted in a fine caring loan shark (ultimately, code words for Joooos BTW), Congress can nobly suggest that in order to help these fine diverse Americans stay in their homes, then one, perhaps two percentum of that home loan interest deduction should be "recaptured" in the name of all that's good and holy.

Hence $300 million will swell into $50 or $60B overnight, Congress gets its photo ops and more schwag to toss at their pals in the develpoment biz.

Posted by: Seafarious 2007-05-04 07:36

#7 1, 2, 3.

Posted by: Nimble Spemble 2007-05-04 07:36

#6 test

Posted by: Seafarious 2007-05-04 07:34

#5 no mo uro, or you buy a smaller house.

Posted by: Deacon Blues 2007-05-04 07:32

#4 Isn't it time we realized that our 75 year obsession with everyone - even those who really can't afford it - living in self-owned housing has become an albatross?

I know why the feds wanted this in the first place, and in 1933 I'm sure it seemed like a great idea, but the end result of this obsession (no other word will do) has been reckless real estate speculation, habitat destruction for lots of animals and plants, loss of open space, a tax code which subsidizes real estate as an investment (not a place to live) while at the same time NOT subsidizing things like stocks and bonds and other investments, a skewing of interest rates from the actual cost of borrowing money, etc.

Home ownership is a great thing for those who can truly afford it, but in 2007 we have enough experience now to know that it makes little sense to throw government money at those who cannot, just to prop up a three-generation old outdated ideal. If you can't afford to live in a house you own, you rent. That's it.

Posted by: no mo uro 2007-05-04 06:12

#3 $300M? WTF is $300M? Fannie Mae wipes its a$$ with $300M. What is going on here? Is this money going directly in to a select few's pockets to get them to do what they should do anyway?

Posted by: gorb 2007-05-04 04:07

#2 It has nothing to do with bailing anyone or anything out. This just happens to be the thing in that miserable whore's judgment that will get him face time on the boob tube this week.

Posted by: JerseyMike 2007-05-04 03:49

#1 Why should the taxpayer bail out subprime bs?

Posted by: 3dc 2007-05-04 01:32

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