HowardReal Estate Tanks in Detroit
August 24th 2007 15:01
In deindustrialized, collapsing cities like Detroit, Michigan, there is panic that more and more people will be evicted over bad mortgages. Jim Cramer of Financial TV fame has warned that at least 7 million families are slated to lose their homes, which is a pre-crash figure.
--Politicians are panicking over the prospect that anger is boiling over in the population over current and coming home foreclosures. Many proposals to respond to the crisis are before the Congress, ranging from extremely weak to outright dangerous.
In an August 22 release, Senator Charles E. Schumer, chairman of the Joint Economic Committee and the Senate Banking Subcommittee on Housing, in letters to Federal Reserve Chair Bernanke, Treasury Secretary Paulson, Administrator of National Banks Dugan, and others in the subprime mortgage industry, stressed that simply providing liquidity to the credit markets, as the Fed has been doing, does not address the fundamental problems of the mortgage markets. "It is essential that the Federal agencies overseeing the financial markets use their influence over the major market players to encourage them to engage in a major effort to modify or refinance the loans that have a high probability of defaulting, so that the upcoming wave of foreclosures...can be abated."
New York Senator Hillary Clinton has issued a plan that will be introduced when Congress returns in September, that intends to help reduce foreclosures by establishing a $1 billion fund to assist state programs help at-risk borrowers avoid foreclosure. State programs could help make single mortgage payments, help renegotiate loan terms, or simply provide financial counseling. Her plan would also expand Fannie Mae's and Freddie Mac's goals, helping larger numbers of at-risk homeowners, and helping arrange payment forbearance and loan restructurings.
Of course, with all that bad MBS (mortgage backed securities) lying around, the disease has spread.
--Politicians are panicking over the prospect that anger is boiling over in the population over current and coming home foreclosures. Many proposals to respond to the crisis are before the Congress, ranging from extremely weak to outright dangerous.
In an August 22 release, Senator Charles E. Schumer, chairman of the Joint Economic Committee and the Senate Banking Subcommittee on Housing, in letters to Federal Reserve Chair Bernanke, Treasury Secretary Paulson, Administrator of National Banks Dugan, and others in the subprime mortgage industry, stressed that simply providing liquidity to the credit markets, as the Fed has been doing, does not address the fundamental problems of the mortgage markets. "It is essential that the Federal agencies overseeing the financial markets use their influence over the major market players to encourage them to engage in a major effort to modify or refinance the loans that have a high probability of defaulting, so that the upcoming wave of foreclosures...can be abated."
New York Senator Hillary Clinton has issued a plan that will be introduced when Congress returns in September, that intends to help reduce foreclosures by establishing a $1 billion fund to assist state programs help at-risk borrowers avoid foreclosure. State programs could help make single mortgage payments, help renegotiate loan terms, or simply provide financial counseling. Her plan would also expand Fannie Mae's and Freddie Mac's goals, helping larger numbers of at-risk homeowners, and helping arrange payment forbearance and loan restructurings.
Of course, with all that bad MBS (mortgage backed securities) lying around, the disease has spread.
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