Nice, I was thinking about getting some but didnt...
Looks like alot of the mortgage stuff is getting a nice little boost from Bush's plan...most are up more in AH and should finish green tomorrow as the details are released...
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Bush Home Loan Plan Could Derail Dems
Wednesday December 5, 6:23 pm ET
By Alan Zibel, AP Business Writer
Lobbyists Hope Bush Rate-Freeze Plan Prevents Democrats' Bankruptcy Proposal on Home Loans
WASHINGTON (AP) -- A White House plan asking lenders and investors to freeze interest rates on troubled mortgages could derail a Democratic proposal giving bankruptcy judges the power to force loan modifications.
Lobbyists for some of the biggest home lenders and some institutional investors in securities backed by mortgages are signing up for a Bush administration plan aimed at averting foreclosure on up to 1.1 million home loans. Some in the industry believe success of the administration's plan will cause political momentum for the Democrats' "cramdown" proposal to fizzle.
Led by Treasury Secretary Henry Paulson, the plan developed by federal regulators and banking executives would ask mortgage servicers to voluntarily freeze rates on subprime loans made to borrowers with weak credit. Details will be unveiled Thursday.
"It's a market-driven approach," said Kurt Pfotenhauer, senior vice president for government affairs at the Mortgage Bankers Association. "We don't need an act of Congress to do it. We don't need to bring judges in to do it."
Under existing law, judges can't modify loan terms on a borrower's primary residence although they can do it on second homes. Democrats on Wednesday pushed for legislation that would extend a bankruptcy judge's so-called 'cramdown' power to modify primary home loans -- and adjust interest rates -- which advocates say could help up to 600,000 homeowners avoid foreclosure.
During a Senate Judiciary Committee hearing Wednesday on the proposal, Sen. Richard Durbin, D.-Ill, said in a statement: "The law should be changed to give American families facing foreclosure the opportunity to negotiate their mortgages," characterizing the change as a small fix for an "outdated bankruptcy code."
Even as the housing market crisis worsens, investors and lenders don't see it that way and are gambling that the Bush administration plan is the "least-bad choice of a number of bad outcomes," Howard Glaser, a mortgage industry consultant said.
The U.S. housing downturn has spooked investors around the world and sent stock markets on a rocky ride since August, as home prices continue to fall, foreclosure rates soar and dozens of lenders shuttered their doors.
"If there's one thing that investors are more worried about than a broad loan modification deal, it's the specter of bankruptcy judges making their own decisions about writing down loans," Glaser said.
Through October, there were about 1.8 million foreclosure filings nationwide, compared with about 1.3 million in all of 2006, according to Irvine, Calif.-based RealtyTrac Inc. With home loan defaults still rising, the trend is expected to worsen next year.
The widely tracked Standard & Poor's/Case-Shiller nationwide housing index, fell 4.5 percent in the third quarter from last year as some analysts predict further declines of 15 percent to 20 percent on an asset that rarely declines in value.
Consumer advocates say judges should be allowed to reduce what's owed on a mortgage if the the current market value of the underlying property falls below the outstanding balance.
Mark Zandi, chief economist at Moody's Economy.com, testified in support of the idea, arguing that the legislation could help borrowers who wouldn't be helped by the Bush plan, which temporarily freezes rates but does not address falling property values. The thinking is that as the market recovers, the value of the homes would rebound.
Zandi, who projects 2.8 million loan defaults next year of which 1.9 million will end up in forclosure, said the bankruptcy law change "would be very helpful in reducing the pressure on housing and mortgage markets and will measurably reduce the odds of recession next year."
Housing industry executives aren't convinced and say they fear the bankruptcy proposal could trigger a flood of bankruptcy filings, and that the mortgage industry's already rocky footing would be further imperiled as lenders charge even higher interest rates to compensate for the risk of having unpaid mortgage balances reduced in court.
Just my opinion...
