Barney Franks has had a primary part in creating this crises and should be impeached!. Having sex with a Fanny Mae director then declaring that all was fine seems to be a coverup of the worst kind.

Isnt it about time we had politicans that did the job expected of them?

IMPEACH Barney Franks!

The basic concept doesn't have to be a give away to the banks. All sinned. For qualified upside down borrowers (those with a chance to repay), for the amount of the difference between what's owed and the present home value, let the govt, the lender and the borrower each take a one third hit, plus make the bank restructures terms to 30 year fixed at current rates. The borrower is 2/3rds less upside down than before, but with better loan terms and certainly much better loan terms than the next loan after walking away from this one. The lender is getting paid at current rates more than the home is worth and much more than lender would net from a foreclosuure. And the govt makes a limited investment.

Why do we always ask the government to bail us out including individual, qualified or non-qualified, prudent or non-prudent consumers? The calling is always under the guise of preventing market risk.

Many prudent people 401(K) took a massive meltdown last year. Need government to replenish the 401(K) accts too.

You buy a home, you take risk--(no one says it will only go up).

Any financial system can absorb a certain amount of graft, but NOT this much graft.

Dean makes a reasoned point.

If the banks get a break at the expense of taxpayers (including those distressed homeowners who pay taxes, why should we not require the banks to give homeowners a break too.

Doesn't fundamental fairness now require some action on behalf of homeowners?

Then there is the FHLB ...

"From Roubini's testimony to Congress on February 26th, 2008:
[T]he widespread use of the FHLB system to provide liquidity – but more clearly bail out insolvent mortgage lenders – has been outright reckless. ... A system that usually provides a lending stock of about $150 billion has forked out loans amounting to over $750 billion in the last year with very little oversight of such staggering lending. The risk that this stealth bailout of many insolvent mortgage lenders will end up costing massive amounts of public money is now rising."

It is time for a Public Central Bank that represents the tax paying public. The current Fed is a private corporation whose chairman and boards are obliged to take care of their shareholders, the Member Banks before the ultimate underwriters the public. The FHLB is just another case of loss shifting from private to public hands.

Where are the economists of the left on this looting of the public? .....AWOL

Rep. Barney Frank is passionate about setting aside $50 Billion for Foreclosure Relief. I would like to alert Rep. Frank that Congress should focus on a group who is especially vulnerable to Foreclosure and whose failure will result not only in loss of home, but also result in millions of lost jobs. I am referring to the millions of Self-Employed Small Business owners who are at-risk of default, foreclosure, and business failure.
A recent national survey determined the extent of involvement of this segment of the small business community in the risky “Toxic” mortgages that are expected to “reset” in 2009, thereby resulting in the 2nd “Tsunami” Wave of Foreclosures that will dwarf the Subprime Mortgage Crisis.
On December 14, 2008, CBS’s “60 Minutes” had a segment on the 2nd Wave of Foreclosures. CBS indicated that experts were expecting another wave of mortgage defaults on ALT-A and Option ARMs mortgages which will dwarf the Subprime Mortgage Crisis. CBS MISSED A VERY IMPORTANT FACT!
Many fail to realize that there are millions of self-employed smaller businesses that are holding these “toxic” mortgages that are going to reset in 2009 through 2012. These borrowers are Prime and Near-Prime borrowers who hold ALT-A, Option ARMs, Interest-Only mortgages. There are $1 Trillion ALT-As, and $500-600 Billion Option ARMs.
So, here we have a major problem. Not only will these small business owners lose their homes, but there will be the resulting JOB LOSSES on their business failure. Although President-Elect Obama is stressing the need to create 3 million new jobs, we must understand that JOB RETENTION IS AS IMPORTANT AS JOB CREATION.
I authored a survey which was conducted by the National Association for the Self-Employed (NASE) to its national membership. The NASE survey is at
http://advocacy.nase.org/research.asp
See the NASE News for the Survey on Toxic Mortgages. Please read my Commentary.
According to this survey, it is estimated that 3,709,800 small business owners hold Alt-A and other “toxic” mortgages. Of this number, 3 million are “very worried” about their ability to make the monthly payment due at “reset” , and 1,279,800 are already delinquent as they have missed one to three or more monthly mortgage payments at mid-November, before the expected Resets that are scheduled to begin in 4th Quarter 2008 through 2012.
The solution lies in the hands of Congress as they meet in January to structure an Economic Stimulus package. Congress should take note of this survey and be “proactive” in addressing the situation, rather than “reactive” as the case has been in the Subprime Mortgage Crisis.
It is a tragedy when an individual borrower defaults on the mortgage and loses his/her home. The tragedy is magnified when the borrower is a small business owner, employing from 1 to 10 employees. The loss of jobs related to mortgage defaults and the resulting business failures will further weaken our economy and prolong the recession.
We can’t afford another shock to our economic system at this time. This 2nd Wave of Foreclosures which will be caused by the ALT-A and Option ARMs will not only result in Foreclosures, but also Job Loss.
I would appreciate if you would bring this info to light in Washington.
Thank you,
Samuel D. Bornstein
Professor of Accounting & Taxation
Kean University, School of Business, Union, NJ
Tel: (732) 493 - 4799
Email: bornsteinsong@aol.com

If so, I think it is usful for people have no capacity to pay loads. And maybe it can promote enomical up.

Allowing the homeowner to stay in the home with a new mortgage for the reduced fair market value on affordable terms sounds like a good idea.

The discussion about "equity" seems to be a red herring. The term "equity" is now commonly used to mean the excess of fair market value over the loan balance, but used to mean the amount of the loan principal repaid by the borrower. The actual monetary loss suffered by foreclosed borrowers is only the repaid principal amount(the reduction in fair market value is a "paper loss"). On a 30-year mortgage, less than 20% of the principal gets repaid during the first 15 years (50% of the loan term) so most of the foreclosed borrowers probably have repaid little of the principal amount. Reducing the principal amount of the loan to current fair market value probably saves them far more money than their total repaid principal. Also, they would benefit from any future increases in fair market value.

Borrowers also probably would find it less desirable to rent the home they previously "owned".