Obama Considering Expansion of Cash for Keys With Taxpayer Money

Editor’s Note: It seems to me that this concedes the battle to Wall Street. It encourages homeowners to take the loss that at the very least should be shared with ALL the players in the securitization scheme and creates more problems in housing and social services.

Excerpt from NYT – do not buy into this –

Program Will Pay Homeowners to Sell at a Loss
By DAVID STREITFELD
Published: March 7, 2010

“In an effort to end the foreclosure crisis, the Obama administration has been trying to keep defaulting owners in their homes. Now it will take a new approach: paying some of them to leave.

This latest program, which will allow owners to sell for less than they owe and will give them a little cash to speed them on their way, is one of the administration’s most aggressive attempts to grapple with a problem that has defied solutions.

More than five million households are behind on their mortgages and risk foreclosure. The government’s $75 billion mortgage modification plan has helped only a small slice of them. Consumer advocates, economists and even some banking industry representatives say much more needs to be done.

For the administration, there is also the concern that millions of foreclosures could delay or even reverse the economy’s tentative recovery — the last thing it wants in an election year.

Taking effect on April 5, the program could encourage hundreds of thousands of delinquent borrowers who have not been rescued by the loan modification program to shed their houses through a process known as a short sale, in which property is sold for less than the balance of the mortgage. Lenders will be compelled to accept that arrangement, forgiving the difference between the market price of the property and what they are owed.

11 Responses

  1. Current discussion of Lehman Brothers and “Repo 105” is a good example of how the investment banks concealed their asset and liabilities from the public. Off-balance sheet accounting was the culprit. Such transactions, which were more “financing” than “true sales” transactions allowed for manipulation of balance sheets and, of course, concealment as to who really owns the mortgage loans (and on whose balance sheets the loans should be accounted for). If we could demonstrate this in court it might go a long way in helping judges understand what really went on. But concealment of transactions was the norm, and most off-balance sheet conduit securitizations were not “true sales” but rather financing transactions and, therefore, should never have been removed from balance sheets. FASB rules 166 and 167 should force more transparency this year but the banks may even find ways to get around these new rules.

    The government does not care about the “little” people and their homes because they have much bigger problems to resolve including restoring global creditability to US financial markets. Not likely.

    Check out the following website for good explanation of Repo 105 – amazing.

    http://ftalphaville.ft.com/blog/2010/03/12/173241/repo-105/

  2. M Turner:

    I have always thought that the mortgage fraud should be approached simultaneously in court and before the government. The government knows that is very difficult for the people to win in court. The courts know that the government has not helped the people. It takes time for the courts to “catch on” to what is really being done to the people. With time, this will reverse. But in the meantime there are just too many victims. Nothing is being done by the people to push the government to correct its terrible mistake. It can only be done if people join together.

  3. You of thought someone would of organized a legal protest with a Million Man March on Washington by now. The Blacks did it, the Farmers did it, The Truckers did it.The Vietnam War Protesters did it too! I guess the Lawyers have every homeowner convinced they can win, bull crap! I’ve been thru (3) useless money-suckers to see NOTHING at all. It’s all a joke with these “Vultures’ here on this recommend list here . Go on “Pacer” and see who won! NO BODY! It’s all hype & pipe. Wallstreet is really bad but most of these lawyers he take money and do not get wins! Anyone can get a loan mod on their own, thats all they are getting and they are getting money for that too from the lenders. What crock!

  4. What on earth are they going to do with all these empty houses they have to pay taxes ( oh forgot they are master tax evaders too ) and maintenance fees. Not toention what a deralict home will do to the value of surrounding properties I guess sqatters will claim rights to the property I had sqatters in my prior home they have more rights than the homeowner it seems .

  5. Sherri, good question. If you have been following sites like this you know understand that each and every so called “help for homeowners” was really a ruse to placate the American people under duress, and buy time for the “wall street” insiders, who god forbid they should ever take a hit like the American people.

  6. What will the administration think of next? We already
    have houses that aren’t being cared for, vagrants making them their humble abode, while tax payers
    are still being the one to foot the bill for there upkeep.
    With all the empty homes that are out there, while
    people live in their cars, why not pay some of them to move out of THEIR (the homeowners) homes, so we can all live more peaceful knowing that some of us have a place to sleep while the pretender lenders make even more off of their illegal doings, with their bonuses, and to think the billions already spent by us tax payers (homeowners), that was initiated by our keeping homeowners in their homes administration,
    that are going to start paying people to leave their homes. Now ain’t that America? What’s Next?

  7. The reason “it” (the government) is doing this kind of crap, it’s because of the millions if not billions of dollars that many of “it”s” members have at risk if the homeowners were to win this war on the “licensed by the government” thieves!!! it is so obvious! they all drink off the same cup and sleep in the same bed, but most shamelessly they ALL SH***&^%T in the same toilet. everybody is being bought by the bank(gang)sters, and i mean ALL the way from the very top to the scummy bottom of this pool of crap that we are being subject and obligated to swim in, the whole scheme it’s completely shameless! and they keep on throwing s*&(t on the wall just to see if it sticks! we all need to keep on complaining about this “childish” treatments that the government keeps on wanting to apply on us, no to the so called “change”, no the their BS, no their lies, and definitely NO their hands reaching into our pockets anymore!!!!! To victory America!!!!

  8. You FORGOT the campaign slogan, “Change”?

    Hey! Hey! Here Homewowner, Here’s some
    spare CHANGE(jingle, jingle). Now GO AWAY.

  9. what a bunch of crap. It pisses me off how they are siding with Wall street every step of the way. Arghh!!

  10. Does the government really think that they can so cheaply “bribe” the American public?

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