Emergency Economic Stabilization Act of 2008 Gives Little Hope for Homeowners

[Joel Fraser]

I have personally read over the preliminary details of the 106 page Wall Street Bailout Bill, called the Emergency Economic Stabilization Act of 2008 (http://money.cnn.com/2008/09/28/news/pdf/index.htm) and I am disappointed to say the least. The bill, as I suspected, will do little to help struggling homeowners and it’s really much of the same foreclosure prevention fluff that has been coming out of Washington since this mortgage and housing crisis started.I am really trying to be positive for my readers and the homeowners coming to my blog for help and hope. Looking for a glimmer of hope, I read the proposed bill. But, I am too much of a realist and I have to cut through the BS and give it to all like it is. Unfortunately, the bill offers little substance and guarantees to ensure homeowners stay in their homes. In fact, I believe it will not make any lasting impact on foreclosures in its current form. Much like the FHA Secure Flop, Hopeless Now and No Hope for Homeowner Programs. Please Washington, can we stop with the clever names? It’s confusing us all or is that the whole point? This bill does exactly what it was intended to do. Bailout Wall Street at our expense, while we get screwed out of just about everything that pertains to us little guys on Main Street. They will continue to live in shiny glass houses and yours and my lanlords will be foreclosed on. (true story) As it stands now, don’t expect this bill to help you much and please keep fighting the good fight. I am sincerley sorry to you all. Life will not change much and we will all still be doing much of the same ole, same ole and the loan modification (http://www.modifyloan.net/) glasswill reamin half empty. Folks, it is looking very bleak on the foreclosure prevention front. Below I copied and pasted the details of the bill as it pertains to homeowners seeking a loan modification (http://www./) or loan workout with their servicer and foreclosure fighters everywhere. Please read this and write to me or comment below and tell me if you see anything in this bill different than me? Meaning, real help and hope for homeowners! Most of all, write your Senators and demand that servciers be held accountable, hire more staff, open more foreclosure prevention centers and mandatory loan workouts take place with true guidelines that we all can follow and make sense. Contact your state’s senator by clicking this link ASAP and let them know what you think. (http://www.senate.gov/general/contac...nators_cfm.cfm) *Here are the details that pertain to homeowners:* SEC. 109. FORECLOSURE MITIGATION EFFORTS. 5 (a) RESIDENTIAL MORTGAGE LOAN SERVICING 6 STANDARDS.—To the extent that the Secretary acquires 7 mortgages, mortgage backed securities, and other assets 8 secured by residential real estate, including multifamily 9 housing, the Secretary shall implement a plan that seeks 10 to maximize assistance for homeowners and use the au11 thority of the Secretary to encourage the servicers of the 12 underlying mortgages, considering net present value to the 13 taxpayer, to take advantage of the HOPE for Home14 owners Program under section 257 of the National Hous15 ing Act or other available programs to minimize fore16 closures. In addition, the Secretary may use loan guaran17 tees and credit enhancements to facilitate loan modifica18 tions to prevent avoidable foreclosures. (b) COORDINATION.—The Secretary shall coordinate 20 with the Corporation, the Board (with respect to any 21 mortgage or mortgage-backed securities or pool of securi22 ties held, owned, or controlled by or on behalf of a Federal 23 reserve bank), the Federal Housing Finance Agency, the 24 Secretary of Housing and Urban Development, and other 25 Federal Government entities that hold troubled assets to 261 attempt to identify opportunities for the acquisition of 2 classes of troubled assets that will improve the ability of 3 the Secretary to improve the loan modification and re4 structuring process and, where permissible, to permit bona 5 fide tenants who are current on their rent to remain in 6 their homes under the terms of the lease. In the case of 7 a mortgage on a residential rental property, the plan re8 quired under this section shall include protecting Federal, 9 State, and local rental subsidies and protections, and en10 suring any modification takes into account the need for 11 operating funds to maintain decent and safe conditions at 12 the property. 13 (c) CONSENT TO REASONABLE LOAN MODIFICATION 14 REQUESTS.—Upon any request arising under existing in15 vestment contracts, the Secretary shall consent, where ap16 propriate, and considering net present value to the tax17 payer, to reasonable requests for loss mitigation measures, 18 including term extensions, rate reductions, principal write 19 downs, increases in the proportion of loans within a trust 20 or other structure allowed to be modified, or removal of 21 other limitation on modifications. 22 SEC. 110. ASSISTANCE TO HOMEOWNERS AND LOCALITIES. 23 (a) DEFINITIONS.—As used in this section— 24 (1) the term ‘‘Federal property manager’’ 25 means— 1 (A) the Federal Housing Finance Agency, 2 in its capacity as conservator of the Federal 3 National Mortgage Association and the Federal 4 Home Loan Mortgage Corporation; 5 (B) the Corporation, with respect to resi6 dential mortgage loans and mortgage-backed se7 curities held by any bridge depository institu8 tion pursuant to section 11(n) of the Federal 9 Deposit Insurance Act; and 10 (C) the Board, with respect to any mort11 gage or mortgage-backed securities or pool of 12 securities held, owned, or controlled by or on 13 behalf of a Federal reserve bank; 14 (2) the term ‘‘consumer’’ has the same meaning 15 as in section 103 of the Truth in Lending Act (15 16 U.S.C. 1602); 17 (3) the term ‘‘insured depository institution’’ 18 has the same meaning as in section 3 of the Federal 19 Deposit Insurance Act (12 U.S.C. 1813); and 20 (4) the term ‘‘servicer’’ has the same meaning 21 as in section 6(i)(2) of the Real Estate Settlement 22 Procedures Act of 1974 (12 U.S.C. 2605(i)(2)). 23 (b) HOMEOWNER ASSISTANCE BY AGENCIES.— 24 (1) IN GENERAL.—To the extent that the Fed25 eral property manager holds, owns, or controls mort28 O:\AYO\AYO08B94.xml [Discussion Draft] 1 gages, mortgage backed securities, and other assets 2 secured by residential real estate, including multi3 family housing, the Federal property manager shall 4 implement a plan that seeks to maximize assistance 5 for homeowners and use their authority to encourage 6 the servicers of the underlying mortgages, and con7 sidering net present value to the taxpayer, to take 8 advantage of the HOPE for Homeowners Program 9 under section 257 of the National Housing Act or 10 other available programs to minimize foreclosures. 11 (2) MODIFICATIONS.—In the case of a residen12 tial mortgage loan, modifications made under para13 graph (1) may include—14 (A) reduction in interest rates; 15 (B) reduction of loan principal; and 16 (C) other similar modifications. 17 (3) TENANT PROTECTIONS.—In the case of 18 mortgages on residential rental properties, modifica19 tions made under paragraph (1) shall ensure— 20 (A) the continuation of any existing Fed21 eral, State, and local rental subsidies and pro22 tections; and23 (B) that modifications take into account 24 the need for operating funds to maintain decent 25 and safe conditions at the property. 1 (4) TIMING.—Each Federal property manager 2 shall develop and begin implementation of the plan 3 required by this subsection not later than 60 days 4 after the date of enactment of this Act. 5 (5) REPORTS TO CONGRESS.—Each Federal 6 property manager shall, 60 days after the date of 7 enactment of this Act and every 30 days thereafter, 8 report to Congress specific information on the num9 ber and types of loan modifications made and the 10 number of actual foreclosures occurring during the 11 reporting period in accordance with this section. 12 (6) CONSULTATION.—In developing the plan re13 quired by this subsection, the Federal property man14 agers shall consult with one another and, to the ex15 tent possible, utilize consistent approaches to imple16 ment the requirements of this subsection. 17 (c) ACTIONS WITH RESPECT TO SERVICERS.—In any 18 case in which a Federal property manager is not the owner 19 of a residential mortgage loan, but holds an interest in 20 obligations or pools of obligations secured by residential 21 mortgage loans, the Federal property manager shall— 22 (1) encourage implementation by the loan 23 servicers of loan modifications developed under sub24 section (b); and 1 (2) assist in facilitating any such modifications, 2 to the extent possible. 3 (d) LIMITATION.—The requirements of this section 4 shall not supersede any other duty or requirement imposed 5 on the Federal property managers under otherwise appli6 cable law.