The Flip Board® – Real Estate Blog

WASHINGTON (AP) – Congressional leaders are racing to push through an array of election-year housing measures that already have stirred up much political wrangling and the White House is examining its own plan to further help homeowners caught in the mortgage meltdown.

With foreclosure signs prevalent and a Wall Street rescue reverberating, majority Democrats want the government to step in and back up to $400 billion in troubled loans. The goal is to help strapped borrowers and thaw a credit market plagued by uncertainty about the value of subprime mortgages made to people with spotty credit or low incomes.

As lawmakers return from their two-week spring recess, their leaders are moving fast to increase the political heat on the housing issue. Many Republicans, though, are resisting what they characterize as heavy-handed federal intervention that could leave taxpayers on the hook for a mortgage bailout.

Senate Democrats plan a test vote this coming week on a series of housing proposals. One would let bankruptcy judges reduce the amount owed and interest payments on loans held by distressed borrowers. President Bush and Republicans strongly oppose the idea.

The Senate took up the plan several weeks ago. But the proposal, which also would make grants available to communities with the highest foreclosure rates so they could buy foreclosed properties, fell well short of the 60 votes it would have needed to advance.

Democrats, however, are determined to put Republicans in the position of making tough votes, given the issue’s potency for voters.

“Our hope is that when Republican members went back home they said ‘Let’s do something,’” said Sen. Charles E. Schumer, chairman of the Joint Economic Committee. “We feel the pressure is mounting and we are hopeful that there will be a change of mind in the Republican leadership,” said Schumer, D-N.Y.

A couple of weeks ago, I told you all about a 3BR/1BA Colonial-style house that sat next to golf course.

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WASHINGTON (Reuters) – The Bush administration is finalizing a plan to rescue thousands of homeowners facing foreclosure by helping them refinance into more affordable loans, the Washington Post reported in its Saturday edition.

The proposal is aimed at assisting borrowers who owe their banks more than their homes are worth due to declining home prices, the Post reported, citing unnamed government officials.

If enacted, it would mark the first time the White House has committed federal dollars to help the most hard-pressed borrowers.

Under the plan, the Federal Housing Administration would encourage lenders to forgive a portion of these loans and issue new, smaller loans in exchange for the backing of the U.S. government, the Post said.

Two leading Democratic lawmakers have recently proposed a similar program to expand the FHA so that it absorbs more failing mortgages once lenders have erased some of the loan amount.

Sen. Christopher Dodd, chairman of the Senate Banking Committee, and Rep. Barney Frank, chairman of the House Financial Services Committee, are expected to push their FHA plan when lawmakers return to Washington next week.

Bush administration officials told the Post that they believe they can accomplish some of the same goals of the legislation through regulatory changes, though important details need to be nailed down.

Administration officials told the Post they opposed some aspects of Frank’s legislation, including a provision to spend $10 billion buying vacant foreclosed homes.

The plan could dampen criticism from Democrats, who say the administration has so far been more concerned with helping Wall Street than with aiding those who are losing their homes in the foreclosure crisis, which threatens to push the economy into a deep recession.

CHICAGO (MarketWatch) — In the swank Country Club area of Anthem, Ariz., Barbara Ward-Windgassen’s rescue group has saved a bichon frise, Lhasa apso and shih tzu — some with their leashes still on — after their owners had abandoned them in their foreclosed high-priced homes.

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Investment Firms Tap Fed for Billions 

Mar 27, 4:36 PM (ET)  By JEANNINE AVERSA

WASHINGTON (AP) – Big Wall Street investment companies are taking advantage of the Federal Reserve’s unprecedented offer to secure emergency loans, the central bank reported Thursday.Those firms averaged $32.9 billion in daily borrowing over the past week from the new lending facility, compared with $13.4 billion the previous week. The program, which began last Monday, is part of the Fed’s effort to aid the financial system.On Wednesday alone, lending reached $37 billion.The Fed, for the first time, agreed on March 16 to let big investment houses temporarily get emergency loans directly from the central bank. This mechanism, similar to one available for commercial banks for years, will continue for at least six months. It was the broadest use of the Fed’s lending authority since the 1930s. Last week, Goldman Sachs, Lehman Brothers and Morgan Stanley said they had begun to test the new lending mechanism. The Fed does not release the identity of the borrowers using the facility.The Fed created a way for investment firms to have regular access to a source of short-term cash. This lending facility is seen as similar to the Fed’s “discount window” for banks. Commercial banks and investment companies pay 2.5 percent in interest for overnight loans from the Fed.

Experts say it is in everyone’s interest to settle these loans, but doing so is not always easy. Consider Randy and Dawn McLain of Phoenix.

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An awful lot of people were on the phone to their mortgage brokers last week–according to the Mortgage Bankers Association’s Weekly Applications Survey.

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I saw yet another news article this morning giving the same old non-sequitors and passing it off as good journalism and financial reporting.  The headline read, “US’s housing prices fall at record rate”.  Yeah, well, DUH?!

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The pace of existing home sales in the United States rose in February to a 5.03 million-unit annual rate while prices took a record fall, the National Association of Realators said in a report on Monday that painted a mixed picture for the housing market.

While February broke a six-month streak of decreasing home sales, it also saw an 8.2 percent decline in median home prices from a year ago. That drop to $195,900 was the sharpest since the trade group began keeping records in 1968.

Economists polled by Reuters were expecting home resales to fall to a 4.85 million-unit pace from the 4.89 million-unit rate for January, which remained unrevised.

The U.S. dollar rose and U.S. Treasury prices extended their drop to session lows after the stronger-than-expected data.

Lawrence Yun, NAR chief economist, said the home price decline probably spurred sales in some regions.

“Falling prices increase affordability but at the same time there is a psychological element of buyers who are sitting on the fence while prices drop,” he said.

The inventory of homes for sale fell 3 percent to 4.03 million units at the end of February, which represents a 9.6 months’ supply at the current sales pace.

Only the West saw sales decrease, with sales down 1.1 percent, while the other regions saw sales rise. Home sales were up 11.3 percent in the Northeast, 2.5 percent in the Midwest and 2.1 percent in the South.

“The reality is that it used to be relatively easy to predict where mortgage rates were going to go,” says Mike Larson, real estate analyst for Money & Markets, a business website.

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