Replies to post #148355 on Simply Politics and News (GOV)

[extelecom]

Aid to Homeowners May Double Under Bush-Backed Loan Initiative
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By Rebecca Christie and Margaret Chadbourn
Dec. 22 (Bloomberg) -- The mortgage-industry effort to stem foreclosures aims to double the number of borrowers getting help next year, as Democrats call for using taxpayer money to address the crisis.

The Hope Now Alliance, a group created at the behest of Treasury Secretary Henry Paulson last year, expects to modify about 2 million mortgages next year, according to a report to be released today in Washington. The group, which includes JPMorgan Chase & Co., Citigroup Inc. and Bank of America Corp., also plans a new campaign to boost participation in the program.

Democrats have repeatedly dismissed the effectiveness of Hope Now, the Bush administration’s main initiative on mortgages. Top finance lawmakers plan legislation early next month that would deploy the second half of the government’s $700 billion bank-bailout fund to stem foreclosures.

Voluntary modifications by mortgage lenders are “too little, too late,” said Nicolas Retsinas, director of Harvard University’s Joint Center for Housing Studies in Cambridge, Massachusetts. As mounting job losses cause foreclosure rates to rise, “we clearly need a more activist government intervention,” he said.

Hope Now projects 950,000 loan modifications for 2008, including 208,000 for the month of November. Including repayment plans and other assistance, the group estimates that about 2.2 million foreclosures will have been prevented this year, bringing to 3 million the total averted since the program began in 2007.

‘Buck Up’

“We have to buck up and be smarter and faster and more effective going forward because the problem hasn’t gone away,” Faith Schwartz, the alliance’s director, said in a telephone interview.

Hope Now, which also includes Fannie Mae, Freddie Mac and securities and banking industry lobbying groups, is scheduled to release its report at 10 a.m. in Washington.

The Hope Now programs are voluntary and privately funded. Critics say they don’t go far enough to stem the housing crisis, which has mushroomed into a broader wave of economic distress. The U.S. economy may shrink more than 6 percent in the last three months of this year, the worst performance in a quarter century, private forecasters are projecting.

“We’re in a crisis now -- how many people’s homes will be foreclosed?” House Financial Services Committee Chairman Barney Frank, a Massachusetts Democrat, said in a Dec. 19 interview.

Frank said he’s drafting legislation with Senate Banking Committee Chairman Christopher Dodd that would release the remaining $350 billion of the financial-rescue fund in exchange for foreclosure help.

TARP Request

Paulson exhausted the first half of the fund, known as the Troubled Asset Relief Program, last week with $13.4 billion of loans to prevent General Motors Corp. and Chrysler LLC from collapsing in coming weeks. The Treasury used most of the rest for injecting capital into banks, after abandoning an original plan to purchase mortgages and related securities.

Frank and Dodd want an agreement with Paulson and President-elect Barack Obama’s team on how to use the next half of TARP. “Why wait three weeks” until Obama takes office, Frank said. “Let’s do it.”

The Democratic plan includes provisions to hold banks accountable for stepped-up lending to consumers.

Paulson last week urged Congress to release the next $350 billion. A Treasury official said he expected talks to start soon between the administration, lawmakers and Obama transition officials on the matter.

New Initiatives

The proposal by Frank incorporates a number of different ideas for using taxpayer funds.

The legislation will include Federal Deposit Insurance Corp. Chairman Sheila Bair’s foreclosure-prevention plan, which provides a U.S. guarantee for troubled mortgages to spur loan modifications, Frank said. Bair says using $24 billion from TARP for the effort might prevent 1.5 million foreclosures.

Frank also wants to revise the Hope for Homeowners program. That initiative, run by the Federal Housing Administration and begun in July, intends to aid 400,000 homeowners by insuring as much as $300 billion in refinanced mortgages after servicers forgive part of the balance. Few lenders have signed up because of the fees and portion of loans that must be written down.

A Paulson proposal to drive down mortgage rates through new securities would also be incorporated. The program would use Fannie and Freddie, the federally chartered mortgage financiers the government seized in September, to reduce 30-year, fixed rates for new loans to about 4.5 percent from an average of about 5.54 percent.

Agency Purchases

The Federal Reserve and Treasury are already purchasing mortgage-backed securities from Fannie and Freddie in an effort to shore up lending. The Fed has bought $13.4 billion of so- called agency debt through a program started three weeks ago, which has had some impact on borrowing costs.

The yield gap between Fannie’s two-year debt and two-year Treasuries, which can affect the mortgage rates consumers pay, narrowed Dec. 19 to 0.55 percentage point, the smallest since Sept. 12, compared with a record 1.82 percentage point on Nov. 20, data compiled by Bloomberg show.

To access the rest of TARP, Paulson has to report to Congress on how the funds would be used. Lawmakers then have 15 days to pass legislation blocking the money. The president could then veto the congressional vote, forcing lawmakers to come up with a bigger majority to prevent the disbursement.

The Hope Now Alliance will continue its work whether or not the government commits money to a homeowner-assistance program, Steve Bartlett, president of the Financial Services Roundtable, a Washington-based industry group, said in an interview.

‘More Money’

“Prior to this, the Treasury has not chosen to do that,” Bartlett said. “If they do it, we’ll be able to get more modifications, because there’s more money to go around.”

Hope Now is using a mixture of lower interest rates, loan extensions and principal deferments to help borrowers stay in their homes. In some cases, lenders also may take principal writedowns to reflect lower home values.

Some studies say loan-modification efforts aren’t very effective because many homeowners fall back into default. A report released last week from the Association of Consumer Bankruptcy Attorneys said lender-driven programs are “flopping” by putting some borrowers further into debt.

U.S. foreclosure filings increased 71 percent in the third quarter from a year earlier to the highest on record as home prices fell and stricter mortgage standards made it harder for homeowners to sell or refinance, RealtyTrac Inc., the Irvine, California-based provider of default data, reported last month.

Outreach Efforts

Next year, Hope Now aims to reach twice as many troubled homeowners through workshops held around the country, which this year drew about 20,000 people. The group plans to increase publicity for its Web site and telephone hotline, 1-888-955-HOPE, while also backing efforts that would allow borrowers to seek loan modifications before their mortgage is formally in default.

“We think we’ll be able to modify every single mortgage where the person has sufficient income to pay a mortgage that reflects the value of their home,” Bartlett said.

To contact the reporters on this story: Rebecca Christie in Washington at [e-mail]; Margaret Chadbourn in Washington at [e-mail].
Last Updated: December 22, 2008 00:01 EST
http://www.bloomberg.com/apps/news?pid=20670001&refer=home&sid=aX4FtYxH449M

[extelecom]

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=34331333

[Gulfbreeze]

How one sided you are! Dodd and Frank pushed the whole thing as hard or harder than Bush, Yet you just blame the one when they are all guilty...

[SoxFan]

The amazing thing about the arrogance of these bankers is that the WH and Congress has asked them how they have spent the money we gave them and they just gave us the finger and said they are not going to tell us. I say let's nationalize some of these banks - start with Citigroup and scare the bejesus out of them.

[tinner]

Who can forget Yogi and Paulson having the balls to go to congress with a 3 page bill saying.......We screwed things up so badly AGAIN....being the typical REPUBLICANS that they are......give us the money....trust us to screw it up AGAIN.......and or by the way we don't need any stinking oversite either!

[tinner]

More on Yogi and Paulson's no strings attached money! I wish I could make things like this up!!!!!!!!!!!!!!!!!!!!! Got to save those fat ass REPUBLICANS!

$1.6 Billion In Taxpayor TARP Money Paid For Executive Bonuses & Lavish Perks
Posted on December 22, 2008 by mcauleysworld
$1.6 billion went to bailed-out bank execs
Records show bonuses, chauffeurs, health club benefits


updated 2:03 p.m. ET, Sun., Dec. 21, 2008

Banks that are getting taxpayer bailouts awarded their top executives nearly $1.6 billion in salaries, bonuses, and other benefits last year, an Associated Press analysis reveals.

The rewards came even at banks where poor results last year foretold the economic crisis that sent them to Washington for a government rescue. Some trimmed their executive compensation due to lagging bank performance, but still forked over multimillion-dollar executive pay packages.

Benefits included cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management, the AP review of federal securities documents found.





The total amount given to nearly 600 executives would cover bailout costs for many of the 116 banks that have so far accepted tax dollars to boost their bottom lines.




The AP compiled total compensation based on annual reports that the banks file with the Securities and Exchange Commission. The 116 banks have so far received $188 billion in taxpayer help. Among the findings:

The average paid to each of the banks’ top executives was $2.6 million in salary, bonuses and benefits.
Lloyd Blankfein, president and chief executive officer of Goldman Sachs, took home nearly $54 million in compensation last year. The company’s top five executives received a total of $242 million.
Even where banks cut back on pay, some executives were left with seven- or eight-figure compensation that most people can only dream about. Richard D. Fairbank, the chairman of Capital One Financial Corp., took a $1 million hit in compensation after his company had a disappointing year, but still got $17 million in stock options. The McLean, Va.-based company received $3.56 billion in bailout money on Nov. 14.
John A. Thain, chief executive officer of Merrill Lynch, topped all corporate bank bosses with $83 million in earnings last year. Thain, a former chief operating officer for Goldman Sachs, took the reins of the company in December 2007, avoiding the blame for a year in which Merrill lost $7.8 billion. Since he began work late in the year, he earned $57,692 in salary, a $15 million signing bonus and an additional $68 million in stock options. Like Goldman, Merrill got $10 billion from taxpayers on Oct. 28.
Banks that got bailout funds also paid out millions for home security systems, private chauffeured cars, and club dues. Some banks even paid for financial advisers. Wells Fargo of San Francisco, which took $25 billion in taxpayer bailout money, gave its top executives up to $20,000 each to pay personal financial planners.

At Bank of New York Mellon Corp., chief executive Robert P. Kelly’s stipend for financial planning services came to $66,748, on top of his $975,000 salary and $7.5 million bonus. His car and driver cost $178,879. Kelly also received $846,000 in relocation expenses, including help selling his home in Pittsburgh and purchasing one in Manhattan, the company said.

Goldman Sachs’ tab for leased cars and drivers ran as high as $233,000 per executive. The firm told its shareholders this year that financial counseling and chauffeurs are important in giving executives more time to focus on their jobs.

JPMorgan Chase chairman James Dimon ran up a $211,182 private jet travel tab last year when his family lived in Chicago and he was commuting to New York. The company got $25 billion in bailout funds.

http://www.msnbc.msn.com/id/28337800/page/2/

[nostinkinc]

We will just have to see how "The Promiser" does. My guess is more of the same and boy howdy are you going to be pissed when he sends more troops to the Middle East next month...