/PRNewswire/ -- First loan modifications, then short sales ... now it's the short refi. Officially known as the FHA Short Refinance Program, it's the latest band-aid in Obama's bailout plans aimed at resuscitating Florida's underwater homeowners facing foreclosure. Oppenheim Law helps homeowners understand the "short refi" pros and cons.
The FHA Short Refinance Plan now offers aid to people who owe more than their mortgage is worth. Will it bring life back to the real estate market and stimulate the economy? This is the question market analysts and legal bloggers like Florida Attorney Roy Oppenheim are debating.
One of the biggest dangers facing the housing market is the glut of underwater homeowners who could default if their financial situations or home prices worsen. About 11 million borrowers, or 23% of households with a mortgage, were underwater as of June 30, 2010, according to CoreLogic Inc. That number is expected to double next year.
"This is a much needed program, but just might be a case of too little, too late," says Oppenheim, who continues to help Florida homeowners navigate through the tides of the real estate market. "Servicers will not be highly motivated and sometimes inclined to steer towards foreclosure." In addition, the Program, at best, is designed to help about four million homeowners according to the U.S. Housing and Urban Development (HUD) Website.
Criteria for FHA Short Refi Program
-- Must occupy subject property as their primary residence
-- Must be current in your mortgage loan
-- Must be in a non-FHA loan
-- Credit score must be at least 500
-- Bank must agree to write off at least 10% of principal and
-- Second mortgage must be willing to cooperate (if applicable)
For two years, Oppenheim Law has advocated a much broader and bolder refi program pushing for an FDR-style program modeled after the Homeowner's Loan Corporation that assisted underwater homeowners during the Depression.
"History proves it's always the refinance market leading the country out of recession. This time, because the banks have absolutely no incentive to refi, they will not," said Oppenheim. "A strong government program could easily and quickly pump $50 billion back into the economy."
William H. Gross, managing director at Pimco, a giant manager of bond funds, has also proposed the government refinance millions of mortgages at lower rates.
"A more comprehensive short refi program would increase jobs and improve consumer sentiment," noted Oppenheim.
Showing posts with label bailout. Show all posts
Showing posts with label bailout. Show all posts
Tuesday, September 14, 2010
Wednesday, May 12, 2010
Seniors: 'Unlimited' Bailout of Nuclear Power Under Climate Bill is as Bad or Worse Than Wall Street Bailout
/PRNewswire/ -- If your Member of Congress says he or she opposes more bailouts and then turns around and supports the Senate climate bill released today, they are simply not telling you the truth, according to the independent and nonprofit Alliance for Generational Equality (AGE), which represents seniors as well as Americans in other generations.
AGE wants all seniors to know that the Senate climate bill contains $54 billion in loan guarantees for new reactors, in addition to 20 years of unlimited loan guarantee authority for new reactors established in the referenced Senate energy bill (S.1462) that would leave taxpayers on the hook for what would likely be huge sums. Of particular concern: the Congressional Budget Office estimates that the default rate on new reactors will be "very high - well above 50 percent."
AGE Vice President and CEO Dave Herman said: "This is not about whether you support or you oppose nuclear power. For elected officials, it is about whether they are being sincere in saying no more federal bailouts. Whether it's for banks, car companies, investment firms or nuclear reactors, a bailout is a bailout is a bailout. In fact, this is even worse than the earlier bailouts since the nuclear loan guarantees are unlimited, meaning there is literally no limit to how deeply the industry could reach into taxpayers' pockets."
Herman added: "How can Republicans in the Senate who are opposing financial reform legislation because of the fear of potential bailouts, then turn around here and dole out what are explicit bailouts for another industry? Federal loan guarantees for new reactors encourage utilities that are currently financially sound to take enormous risks and promise in advance to bail out them out with U.S. taxpayer dollars when the bets go bad. Federal loan guarantees that put U.S. taxpayers directly on the hook in advance are not only a huge drain on federal tax dollars waiting to happen, but they actually somehow manage to do the impossible by making the earlier bailouts look like good deals."
Herman concluded: "We need a little less socialism from Washington and a lot more faith in the wisdom of the marketplace. We don't care if the nuclear power industry wants to build more nuclear reactors. This is a very profitable industry with extensive foreign ownership that already makes a guaranteed profit in most states under utility regulation. If these companies controlled by French, Japanese and U.S. interests want to finance new reactors and find investors who want to support that, they have our blessing. But we are not prepared as taxpayers to allow seniors and other Americans to be ripped off by yet another multi-billion-dollar bailout for another industry."
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AGE wants all seniors to know that the Senate climate bill contains $54 billion in loan guarantees for new reactors, in addition to 20 years of unlimited loan guarantee authority for new reactors established in the referenced Senate energy bill (S.1462) that would leave taxpayers on the hook for what would likely be huge sums. Of particular concern: the Congressional Budget Office estimates that the default rate on new reactors will be "very high - well above 50 percent."
AGE Vice President and CEO Dave Herman said: "This is not about whether you support or you oppose nuclear power. For elected officials, it is about whether they are being sincere in saying no more federal bailouts. Whether it's for banks, car companies, investment firms or nuclear reactors, a bailout is a bailout is a bailout. In fact, this is even worse than the earlier bailouts since the nuclear loan guarantees are unlimited, meaning there is literally no limit to how deeply the industry could reach into taxpayers' pockets."
Herman added: "How can Republicans in the Senate who are opposing financial reform legislation because of the fear of potential bailouts, then turn around here and dole out what are explicit bailouts for another industry? Federal loan guarantees for new reactors encourage utilities that are currently financially sound to take enormous risks and promise in advance to bail out them out with U.S. taxpayer dollars when the bets go bad. Federal loan guarantees that put U.S. taxpayers directly on the hook in advance are not only a huge drain on federal tax dollars waiting to happen, but they actually somehow manage to do the impossible by making the earlier bailouts look like good deals."
Herman concluded: "We need a little less socialism from Washington and a lot more faith in the wisdom of the marketplace. We don't care if the nuclear power industry wants to build more nuclear reactors. This is a very profitable industry with extensive foreign ownership that already makes a guaranteed profit in most states under utility regulation. If these companies controlled by French, Japanese and U.S. interests want to finance new reactors and find investors who want to support that, they have our blessing. But we are not prepared as taxpayers to allow seniors and other Americans to be ripped off by yet another multi-billion-dollar bailout for another industry."
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