Mortgage bail outs start

Discussion in 'Stock picks and trading strategies' started by TonyM, Mar 24, 2007.

  1. TonyM

    TonyM Active Member weekly contest winner

    Ohio Plans Bonds to Bail Out Homeowners Strapped by Mortgages

    By Martin Z. Braun

    March 23 (Bloomberg) -- Ohio, which had the highest foreclosure rate among the 50 U.S. states at the end of 2006, plans to issue $100 million in taxable municipal bonds next month to help homeowners refinance mortgages they can't afford.

    Proceeds of the bond issue by the Ohio Housing Finance Agency will provide financing for about 1,000 loans with a fixed rate of about 6.75 percent, said Robert Connell, the agency's director of debt management.

    ``We believe that it is incumbent on this agency to do something to assist these folks to enable them to keep their homes,'' Connell said. ``A $100 million bond from this agency is not going to solve Ohio's foreclosure problem. We hope to at least make a dent.''

    A March 13 survey by the Mortgage Bankers Association found that Ohio had highest rate of homes in foreclosure nationwide. The state, whose economy has suffered amid declines in manufacturing, also had the highest rate of subprime loans in foreclosure. Subprime mortgages are granted to people with poor credit histories or high debts and often have rates at least 2 or 3 percentage points above safer prime loans.

    Earlier this month, Ohio Governor Ted Strickland, a Democrat, formed a task force to stem home foreclosures in Ohio. The group will develop strategies to assist homeowners facing foreclosure and educate homebuyers.

    April Rollout

    Ohio will begin rolling out the refinancing program on April 2, Connell said. The loans will be limited to homeowners whose income is up to 125 percent of the median income of their county.

    ``It will be available to the residents of Ohio to take them out of their adjustable-rate mortgages, their interest-only mortgages and avail them the opportunity to move into a fixed rate mortgage which may now benefit their individual financial situation,'' Connell said.

    Kansas City, Missouri-based George K. Baum & Co. will manage the bond sale for Ohio's finance agency. The bonds will taxable because the U.S. tax code prohibits states and local governments from using proceeds of tax-exempt bonds to refinance existing mortgages, Connell said.

    The survey by the Mortgage Bankers Association found that Ohio's foreclosure rate across all loan types was 3.38 percent. Indiana was second among U.S. states with 2.97 percent and Michigan was 2.39 percent. Ohio also led the nation will 11.32 percent of subprime loans in foreclosure.

    Also today, lawmakers in California and New Jersey said they plan to hold special hearings on subprime home lending and how it may affect residents in their states.

    Massachusetts officials earlier this month subpoenaed UBS AG and Bear Stearns Cos. as part of an investigation into why the companies wrote upbeat reports on subprime mortgage lenders as bad loans rose to a four-year high.

    To contact the reporter on this story: Martin Z. Braun in New York at mbraun6@bloomberg.net .
     
  2. cramerica1972

    cramerica1972 Active Member

    Re: Mortgage bail out's start

    there should be NO bailout.....they knew what they were getting into when they took the loans.
     
  3. Svenwulf

    Svenwulf Active Member won weekly contest 2x

    Re: Mortgage bail out's start

    ..something about tossing money out of a helicopter?....
     
  4. Lou

    Lou Member

    Re: Mortgage bail out's start

    its kinda a catch 22 - Ohio's economy, at least in Cleveland is dead because LTV steel is now gone. so, Strickland, a Democrat, cannot let the state fall much further. also, the mortgage laws in Ohio are different than 95% of the other states, mortgage companies can defraud a client and NOT be held accountable, in Cali, Florida, Texas, its opposite, Ohio is changing the law slowly. now, if your a moron customer who takes out a option arm or whatever and you dont understand that, and that causes you to lose your house, well thats life in my eyes. plus, it creates a great buying opportunity to buy new hud homes, which i am ready jump all over
     
  5. Jazen

    Jazen Guest

    Re: Mortgage bail out's start

    Yeah? And where do you think they will get the money to bail out the mortgage companies? From you, dude.
     
  6. Lou

    Lou Member

    Re: Mortgage bail out's start


    your on drugs. not me. the mortgage companies will go out of business or get bought out. tax dollars has nothing to do with mortgage companies.
     
  7. spanky

    spanky Member won weekly contest 2x

    Re: Mortgage bail out's start

    Who says it's through taxes that they make it up? They just tack on more fees and only mortgage at a slightly higher interest rate. Trust me, the business will not just write off the loss, they always pass it on to the consumer... that's you and me
     
  8. Lou

    Lou Member

    Re: Mortgage bail out's start


    your statement makes no sense. the state is going to issue muni bonds. they (muni bonds) will be paid back by state fee's or taxes (sales, corporate, property) etc. if a lender/bank has a mortgage and those go into foreclosure, they either write it off at a total loss or buy it back at 80 cents on the dollar at auction, either way its a loss. my tax dollars are going to 1000 families to stay in a house. thats not a bad thing, its actually a good thing. the housing market stays a float, some mother with two kids gets to keep her home, some family who's father lost his job gets to keep his kids in a home. all the lenders/banks have to be approved with the ohio finance agency. its not like spanky mortgage can come in charge them 5% on a origination fee, its limited to 1%. 100m is nothing, id rather my tax dollars go to a good cause then some inner social program that doesnt work or a tax abatement to walmart. nothing in the post states that ohio, or any other state is giving 100m to mortgage companies so they can stay in business. has anyone in the senate talked about giving millions to new century to bail them out? not really, people on one side say let the market correct, people on the other side say more regulation.
     
  9. robvia

    robvia Member

    Re: Mortgage bail out's start

    All I hear about is the "Subprime" thing.

    It should have nothing to do with the market as a whole, but it does. Even when there is good news about the housing market, that "subprime" word comes up. I wish they'd get over it already.

    If the mortgage companies make bad loans and go out of business then so be it.
    Creidt card companies do the same thing giving the world credit no one pays back. Yet no one is talking about that.
     
  10. Jazen

    Jazen Guest

    Re: Mortgage bail out's start

    Let them burn, serves them right for making stupid loans, it's kind of like weeding out the bad competition? Stupid business people make stupid businesses, then those businesses go out of business. But, I would think you wouldn't be in favor of this at all, being, well, you know.
     
  11. Technical Alchemist

    Technical Alchemist forum leader won penny contest 13x won weekly contest 12x

    Re: Mortgage bail out's start

    Your and my tax dollars at work here, Lou. Friggin' b.s. if you ask me.

    :roll:
     
  12. cramerica1972

    cramerica1972 Active Member

    Re: Mortgage bail out's start

    it is B.S
     
  13. Ramza

    Ramza Member

    Re: Mortgage bail out's start

    It is B.S. indeed - sad to see this country succumb to more socialist principles. Before you know it, the government will start trying to make all of our important decisions for us, because obviously, people simply cannot make decisions for themselves as well as the government can!

    :|
     
  14. Lou

    Lou Member

    Re: Mortgage bail out's start

    its all a matter of opinion. i honestly have no problem with 100m going to people. its 9 dollars out of my pocket. now, if it was going to new century, etc id be calling strickland myself. dont forget, first time gov, saving families, keeping them in their homes, politices 101. i still think its better than some crappy social program that wont work.
     
  15. cramerica1972

    cramerica1972 Active Member

    Re: Mortgage bail out's start

    those ppl knew what they were getting into....if the lose their homes....TOO BAD
     
  16. Technical Alchemist

    Technical Alchemist forum leader won penny contest 13x won weekly contest 12x

    Re: Mortgage bail out's start

    Lou, it is a crappy social program that likely wont work. If oil continues it's ascent the Fed wil be forced to raise rates this year to combat inflation yet again. All those jokers with the liar loans and no money down 80/20 crap will be foreclosing anyway.
     
  17. cramerica1972

    cramerica1972 Active Member

    Re: Mortgage bail out's start

    who exactly is the so-called FED?
     
  18. optimus25

    optimus25 Active Member

    Re: Mortgage bail out's start

    He's talking about the Federal Bank...Bernanke & Co.
     
  19. TonyM

    TonyM Active Member weekly contest winner

    Re: Mortgage bail out's start

    Oh, you mean it's not K-FED? I was wondering what Brittany's ex had to do with this:lol:
     
  20. cramerica1972

    cramerica1972 Active Member

    Re: Mortgage bail out's start

    who owns the FED?foreign nations?
     

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