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FHA Needs 16.3 Billion Bailout So It Can Keep Insuring Loans To Deadbeats

 
Economic Recovery
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11/19/2012 07:52 PM
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FHA Needs 16.3 Billion Bailout So It Can Keep Insuring Loans To Deadbeats
After two foreclosures and two bankruptcies, Hermes Maldonado is as surprised as anyone that he's getting a third shot at homeownership.

The 61-year-old machine operator at a plastics factory bought a $170,000 house in Moreno Valley, Calif., this summer that boasts laminate-wood floors and squeaky clean appliances. He got the four-bedroom, two-story house despite a pockmarked credit history.
Promo-300x250-RE Location

The last time he owned a home, Maldonado refinanced four times and took on a second mortgage. He put a Cadillac and Mercedes-Benz C300W in the driveway and racked up about $45,000 in credit card bills and other debts. His debt-fueled lifestyle ended only when he was forced into bankruptcy.

His re-entry into homeownership three years later came courtesy of the Federal Housing Administration. The agency has become a major source of cash for so-called rebound buyers - a burgeoning crop of homeowners with past defaults who otherwise would be shut out of the market.

"After everything that happened, thank God I was able to buy another house," Maldonado said in Spanish. "Now, it's good because the interest rates are low and there are lots of homes."

The FHA, which backs nearly 8 million loans, is helping rebound buyers recapture the American dream, boosting the housing market in the process. But that's touched off a fierce debate about the financial and ethical wisdom of bankrolling borrowers who contributed to the last housing bubble - and the potential cost to taxpayers.

The agency has suffered deepening losses in the past three years that have put it under enormous scrutiny.

Created during the Great Depression to revive the devastated housing market, the FHA doesn't originate loans. It guarantees mortgages made by banks in exchange for insurance premiums. The agency now insures more than $1 trillion worth of homes. This year it has backed about 14 percent of all mortgage originations, according to the trade publication Inside Mortgage Finance.

Critics worry that the FHA is foolishly allowing marginal buyers to get loans just three years after foreclosure with as little as 3.5 percent down. What's more, the agency doesn't even track how many rebound borrowers it backs.

Exactly how much money is hemorrhaging from the agency could be revealed this week, when the agency files a self-evaluation report to Congress.

According to Bloomberg, House Financial Services Committee Chairman Spencer Bachus, R-Ala., said Thursday that FHA officials have told him the agency will need a bailout from the U.S. Treasury within a month.

What's unclear is how much money the agency needs to stay afloat. The Housing and Urban Development Department, however, has projected that $13 billion might be needed.

At a minimum, the experiences of Maldonado and other rebound borrowers illustrate how fast the financial errors of the boom are being wiped clean by government policy that is eager to give the housing market a boost.

"If somebody goes through foreclosure or bankruptcy, or whatever, you don't allow them to jump back into the housing market as quickly as three years," said Guy Cecala, publisher of Inside Mortgage Finance. "Aren't you setting yourself up for future losses … if you make those loans to the same high-risk borrowers?"

Proponents say rebound lending is essential to the economy. This group has emerged as an unexpected source of strength for housing this year, particularly in badly scarred areas.

Besides, advocates argue, giving people a second chance - or even a third chance - is as deeply ingrained in American culture as buying a home itself.

"It's happening quite a bit," said Doug Shepherd, owner of Shepherd Realty Group in Riverside, Calif. "It is something that is an important part of the coming market."

Home builders and real estate agents are capitalizing on this market.

Some even keep files on former homeowners who will become eligible to apply for new loans once past transgressions are cleared from their credit reports.

Greg McGuff, division president of California's Inland Empire for home builder Lennar Corp., said roughly 1 in 5 buyers in his region had either a previous short sale or a foreclosure. Many of them are eager to own again and often recognize the opportunity that declining prices and low-interest mortgage rates provide.

"They know to the day when the event clears from their credit history," McGuff said. "Buyers are working diligently to improve their credit scores through the use of credit repair companies, not only to meet the minimum requirements, but also to ensure the best interest rate pricing."

The FHA is trying to straddle the line between financial caution and doing what it can to aid the economic recovery.

Housing and Urban Development Secretary Shaun Donovan said the FHA has tightened its standards significantly but must still lend to those who wouldn't otherwise qualify for a mortgage. It's crucial for families to "show that they are responsible, that they have worked hard to reestablish their credit," he said.

Rebound buyers say they simply ran into bad luck during the crisis, and FHA loans have helped them get back on their feet.

Amy Novak, a real estate agent, bought a home in Riverside in 2006 and borrowed extra money to pay for needed repairs. She and her husband fell behind on payments when they lost work. They couldn't get a loan modification and walked away in 2008, she said.

"It was going to be our marriage or the house, so we left right then and moved into a rental and let the house go to foreclosure," Novak said. "We had excellent credit; we were pretty young at the time."

Late last year the couple bought a new home in Riverside with an FHA loan. Novak said she is happy to own again and is paying her mortgage on time every month.

Betty Buenrostro and her husband, Eduardo, took on a risky loan to buy their first home in La Puente, Calif., in 2005. They expected to refinance out of the loan, but Eduardo lost his job when the economy soured, Betty said.

The couple used an FHA loan last year to buy a newer place not far from their previous one.

"It's a three-bedroom house; it was completely remodeled," she said. "It had a brand-new dishwasher, everything was almost all done, and right now I am just happy that I have my house."

Maldonado, who emigrated from Honduras decades ago, said he moved to Moreno Valley in the 1990s to escape the violence of South Los Angeles. He has worked at a Santa Ana, Calif., plastics factory for 32 years.

He speaks English but is more comfortable in his native Spanish. Maldonado doesn't smile often, but he flashes a wide grin when describing his good fortune to own anew.

Shortly after buying their first Moreno Valley home in 1996, Maldonado and his wife began a years-long process of home refinancing to fund an expanding lifestyle, according to a review of the family's property and bankruptcy records by the Los Angeles Times.

Even after defaulting on their first home and declaring bankruptcy, the serial refinancing increased significantly after they bought a second home with a high-interest, adjustable-rate loan from a subprime lender.

Maldonado said his financial woes stemmed from the illness of his mother abroad. But he will also attest to living beyond his means, which records confirm.

Maldonado readily admits his past mistakes but says he has learned his lesson.

"Yes, yes," he said. "Leave behind the credit cards, don't take out a second mortgage. Live with what you can, and don't spend more than you earn."

[link to www.pressofatlanticcity.com]
Anonymous Coward (OP)
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11/19/2012 08:03 PM
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Re: FHA Needs 16.3 Billion Bailout So It Can Keep Insuring Loans To Deadbeats
s226
ceawaves

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11/19/2012 08:13 PM

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Re: FHA Needs 16.3 Billion Bailout So It Can Keep Insuring Loans To Deadbeats
Happens everyday.. know of people who were foreclosed on in 65 thousand dollars house..2 years later they were in 250 thousand dollar house and mortgage that went with it..that house was foreclosed on last spring.. And these people still in a house... Remember: it's never what you know, only who you know.
Anonymous Coward (OP)
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11/19/2012 08:17 PM
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Re: FHA Needs 16.3 Billion Bailout So It Can Keep Insuring Loans To Deadbeats
Happens everyday.. know of people who were foreclosed on in 65 thousand dollars house..2 years later they were in 250 thousand dollar house and mortgage that went with it..that house was foreclosed on last spring.. And these people still in a house... Remember: it's never what you know, only who you know.

Bullshit. It's bankers and the real estate/mortgage industry trying to keep overpriced real estate, overpriced.

Frankly, I wouldn't give a damn if my tax dollars weren't being extorted from me to prop up this corrupt agency.
Anonymous Coward
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11/19/2012 08:17 PM
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Re: FHA Needs 16.3 Billion Bailout So It Can Keep Insuring Loans To Deadbeats
Why is this "shocking"? The laws in the US have been written in such a way as to ensure life long indebted servitude. If you are debt free,own your home,live within your means you actually the "1%". Every where you look there are debtors just begging you for your business for corporate profits. In my book they are called "predators" and they can do business as they like according to the prevailing laws of the land that have been instituted by Republicans and Democrats alike since the advent of the Federal Reserve. Pointing fingers at specific situations deducts from the overall reality that this problem is systemic beyond repair.
ceawaves

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11/19/2012 08:26 PM

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Re: FHA Needs 16.3 Billion Bailout So It Can Keep Insuring Loans To Deadbeats
Happens everyday.. know of people who were foreclosed on in 65 thousand dollars house..2 years later they were in 250 thousand dollar house and mortgage that went with it..that house was foreclosed on last spring.. And these people still in a house... Remember: it's never what you know, only who you know.

Bullshit. It's bankers and the real estate/mortgage industry trying to keep overpriced real estate, overpriced.

Frankly, I wouldn't give a damn if my tax dollars weren't being extorted from me to prop up this corrupt agency.
 Quoting: Anonymous Coward 25582762

You can't inflate foreclosed real estate.. that bubble busted already.
And never said it wasn't, but there are no victims here..not in these types of situation, it's pretty much all money laundering, and ponzi scams. And people leave out the most important factor of all this fraud and carrying on.. the real estate lawyers.. they're the one's behind the curtain..It's impossible to do it with out them.

Last Edited by ceawaves on 11/19/2012 08:26 PM
Brevet

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11/19/2012 08:33 PM

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Re: FHA Needs 16.3 Billion Bailout So It Can Keep Insuring Loans To Deadbeats
Please read this article---



[link to articles.latimes.com]

snips..

After two foreclosures and two bankruptcies, Hermes Maldonado is as surprised as anyone that he's getting a third shot at homeownership.

The 61-year-old machine operator at a plastics factory bought a $170,000 house in Moreno Valley this summer that boasts laminate-wood floors and squeaky clean appliances. He got the four-bedroom, two-story house despite a pockmarked credit history.
-------

The last time he owned a home, Maldonado refinanced four times and took on a second mortgage. He put a Cadillac and Mercedes-Benz C300W in the driveway and racked up about $45,000 in credit card bills and other debts. His debt-fueled lifestyle ended only when he was forced into bankruptcy.

-------------------

His reentry into homeownership three years later came courtesy of the Federal Housing Administration.
-----------------
Anonymous Coward
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11/19/2012 08:38 PM
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Re: FHA Needs 16.3 Billion Bailout So It Can Keep Insuring Loans To Deadbeats
countries need to print their own money and then just print enough to pay back their debt in full so there is no more interest to pay to the banksters. then they could focus their economies on growth to regain prosperity. the current system is just predatory and retarded. its just an excuse for bankers to play god. fuck them.
MrWreckedIt

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11/19/2012 08:44 PM

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Re: FHA Needs 16.3 Billion Bailout So It Can Keep Insuring Loans To Deadbeats
countries need to print their own money and then just print enough to pay back their debt in full so there is no more interest to pay to the banksters. then they could focus their economies on growth to regain prosperity. the current system is just predatory and retarded. its just an excuse for bankers to play god. fuck them.
 Quoting: Anonymous Coward 1779371


so true.
Burt Gummer

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11/19/2012 08:50 PM

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Re: FHA Needs 16.3 Billion Bailout So It Can Keep Insuring Loans To Deadbeats
FHA Needs 16.3 Billion Bailout So It Can Keep Government PROPAGANDA Stats of Housing Numbers Continually Rising.
 Quoting: Economic Recovery 25582762


Fixed. hf


facistprop ochange

Last Edited by Useless Cookie Eater on 11/19/2012 08:51 PM
Anonymous Coward (OP)
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11/19/2012 09:00 PM
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Fixed.

Truth.
Brevet

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11/19/2012 09:07 PM

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Re: FHA Needs 16.3 Billion Bailout So It Can Keep Insuring Loans To Deadbeats
countries need to print their own money and then just print enough to pay back their debt in full so there is no more interest to pay to the banksters. then they could focus their economies on growth to regain prosperity. the current system is just predatory and retarded. its just an excuse for bankers to play god. fuck them.
 Quoting: Anonymous Coward 1779371


This is sarcasm, isn't it? If not, I weep for the planet.
KnightsTemplar.TV

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11/19/2012 09:07 PM
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Re: FHA Needs 16.3 Billion Bailout So It Can Keep Insuring Loans To Deadbeats
Real estate sales is one of the top 5 stimulants of the American economy. No real estate sales, millions of jobs and stores would shut down. It's all part of the show. Embrace these facts as truth and understand that this is just the way it is.

Last Edited by Gnostic Warrior on 11/19/2012 10:51 PM
Regards,

Moe

[link to GnosticWarrior.com] THERE IS A WAR FOR YOUR SOUL!

[link to www.LoanSafe.org] FIGHTING BIG BANKS!
Anonymous Coward (OP)
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11/19/2012 09:15 PM
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Re: FHA Needs 16.3 Billion Bailout So It Can Keep Insuring Loans To Deadbeats
Real estate sales is one of the top 5 stimulants of the American economy. No real estate sales, millions of jobs and stores would shut down. Its all part of the show. Embrace these facts as truth and understand that this is just the way it is.

I don't embrace thieves and liars.

Have fun with that.
KnightsTemplar.TV

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11/19/2012 09:17 PM
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Re: FHA Needs 16.3 Billion Bailout So It Can Keep Insuring Loans To Deadbeats
Real estate sales is one of the top 5 stimulants of the American economy. No real estate sales, millions of jobs and stores would shut down. Its all part of the show. Embrace these facts as truth and understand that this is just the way it is.

I don't embrace thieves and liars.

Have fun with that.
 Quoting: Anonymous Coward 25582762


Either do I , but what are you going to do about it when this is how the world works?

No one is placing a gun to peoples heads to buy a home or get a loan. The tax bailouts and TARP were reality of who is running the show and it ain't the people.

Last Edited by Gnostic Warrior on 11/19/2012 09:18 PM
Regards,

Moe

[link to GnosticWarrior.com] THERE IS A WAR FOR YOUR SOUL!

[link to www.LoanSafe.org] FIGHTING BIG BANKS!
Anonymous Coward
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11/19/2012 09:20 PM
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i have decent credit and have a hell of a time getting a home loan. I'll just start filling out my race as black or putting my nickname tyrone on the application.

I'm sure ill get approved then
Anonymous Coward (OP)
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11/19/2012 09:22 PM
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Either do I , but what are you going to do about it when this is how the world works?

No one is placing a gun to peoples heads to buy a home or get a loan. The tax bailouts and TARP were reality of who is running the show and it ain't the people.


All that is necessary for evil to triumph is for good men to do nothing.

Meaning, if you know the system is corrupt, the very least you can do is not participate in it.
AlcoholicRunner
I abduct humans and drink at the same time.

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11/19/2012 09:35 PM

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What...

The...

Fuck???

I worked my ass off to get near perfect credit score to get 3.25% mortgage loan from FHA.

Awesome...
Anonymous Coward (OP)
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11/19/2012 10:05 PM
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Don't you love how they have retooled the phrase "habitual defaulter" into "rebound borrower"?

Heh.
Anonymous Coward
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11/19/2012 10:23 PM
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Re: FHA Needs 16.3 Billion Bailout So It Can Keep Insuring Loans To Deadbeats
countries need to print their own money and then just print enough to pay back their debt in full so there is no more interest to pay to the banksters. then they could focus their economies on growth to regain prosperity. the current system is just predatory and retarded. its just an excuse for bankers to play god. fuck them.
 Quoting: Anonymous Coward 1779371


This is sarcasm, isn't it? If not, I weep for the planet.
 Quoting: Brevet


I don't. The monetary system in itself is sarcasm. A joke. A scam. They print money whenever they want, so why not make it work for the people? The economic rules we believe exist, simply do not any more. It is our belief in them that makes them exist.

As to the title of this thread, the bankers already keep loaning the fictitious money. The $16.3 Billion is just for their bonuses.
KnightsTemplar.TV

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11/19/2012 10:50 PM
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Re: FHA Needs 16.3 Billion Bailout So It Can Keep Insuring Loans To Deadbeats

Either do I , but what are you going to do about it when this is how the world works?

No one is placing a gun to peoples heads to buy a home or get a loan. The tax bailouts and TARP were reality of who is running the show and it ain't the people.


All that is necessary for evil to triumph is for good men to do nothing.

Meaning, if you know the system is corrupt, the very least you can do is not participate in it.
 Quoting: Anonymous Coward 25582762


I do not buy or sell real estate and actually have an online forum that helps people who have mortgage or foreclosure problems for free. Hence, I AM helping solve the problem rather than adding to it and I am also just not sitting around complaining about it.

What are you doinG to help other than post on GLP?
Regards,

Moe

[link to GnosticWarrior.com] THERE IS A WAR FOR YOUR SOUL!

[link to www.LoanSafe.org] FIGHTING BIG BANKS!
Anonymous Coward
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11/19/2012 11:09 PM
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That's why we need higher taxes and a 55% death tax.

It feels good knowing my hard earned money is going for the greater good of supporting douchebags
ceawaves

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11/20/2012 08:10 AM

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Re: FHA Needs 16.3 Billion Bailout So It Can Keep Insuring Loans To Deadbeats
There was also a report i read several months ago about there being over 100 million dollars in foreclosures still on the books, just waiting until after the election. Read that back in late summer..
ceawaves

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11/20/2012 08:19 AM

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Re: FHA Needs 16.3 Billion Bailout So It Can Keep Insuring Loans To Deadbeats
Real estate sales is one of the top 5 stimulants of the American economy. No real estate sales, millions of jobs and stores would shut down. It's all part of the show. Embrace these facts as truth and understand that this is just the way it is.
 Quoting: KnightsTemplar.TV


Is the top stimulant of the economy, that's where and what the real 'state of the union'is in.. it's always been housing.. the first to go under and the first to start back up.. if there is a start back up this time.
KnightsTemplar.TV

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11/20/2012 10:26 AM
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Re: FHA Needs 16.3 Billion Bailout So It Can Keep Insuring Loans To Deadbeats
Real estate sales is one of the top 5 stimulants of the American economy. No real estate sales, millions of jobs and stores would shut down. It's all part of the show. Embrace these facts as truth and understand that this is just the way it is.
 Quoting: KnightsTemplar.TV


Is the top stimulant of the economy, that's where and what the real 'state of the union'is in.. it's always been housing.. the first to go under and the first to start back up.. if there is a start back up this time.
 Quoting: ceawaves


There will be a start up based on agenda 21 building and plans.

Denver 3

Hence, multi family housing and small homes that are eco friendly in designated private property areas will be the best investments for real estate investors.

king buger

In the mean time, they will allow the buying and selling of property such as the one in this article that allow for the monopoly game to continue in order to stimulate the zombie economy and thus keep people off the streets and making money.

saturnstar

Last Edited by Gnostic Warrior on 11/20/2012 10:30 AM
Regards,

Moe

[link to GnosticWarrior.com] THERE IS A WAR FOR YOUR SOUL!

[link to www.LoanSafe.org] FIGHTING BIG BANKS!
ceawaves

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11/20/2012 03:09 PM

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Re: FHA Needs 16.3 Billion Bailout So It Can Keep Insuring Loans To Deadbeats

Either do I , but what are you going to do about it when this is how the world works?

No one is placing a gun to peoples heads to buy a home or get a loan. The tax bailouts and TARP were reality of who is running the show and it ain't the people.


All that is necessary for evil to triumph is for good men to do nothing.

Meaning, if you know the system is corrupt, the very least you can do is not participate in it.
 Quoting: Anonymous Coward 25582762


I do not buy or sell real estate and actually have an online forum that helps people who have mortgage or foreclosure problems for free. Hence, I AM helping solve the problem rather than adding to it and I am also just not sitting around complaining about it.

What are you doinG to help other than post on GLP?
 Quoting: KnightsTemplar.TV


That is a good thing. Then you know the amount of fraud that's in the whole system, Surely you've seen it. It's way bigger than i am, and don't know how to solve it at this point...powerful people in powerful positions keeping the wheels well oiled..
ceawaves

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11/20/2012 03:45 PM

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Re: FHA Needs 16.3 Billion Bailout So It Can Keep Insuring Loans To Deadbeats
Hence, multi family housing and small homes that are eco friendly in designated private property areas will be the best investments for real estate investors.

================================================
For a little while.. but sooner than later everything will belong to the 'state' no personal property rights at all soon..this is what? phase one.. putting american's out of 'their american dream'

Eco friendly, yeah right, so.. there's a construction under way, i know of that's a LEEDS building.. most are now for the 'green' of it.. anyhow, every hook,bolt,screw, all materials used on this building have to be documented, what they consist of, where they came from, how they are made. So now a company now has to track supplies down literally to where the dirt that's in it came from..

It's all the 2010 international building codes now.

So all this information must to be furnished to the gc before construction begins. Which is almost impossible, because while trying to gather the information one soon finds out that some companies who sale... say the steal needed for the construction can't tell the customer where the steal comes from until they order it.
It's all designed to fail,this one little construction project has several thousand pages of leed specified requirements.. Nothing really wrong with that, Made in America, whole 9 yards...but guess who wrote this leeds mandated thesis? Two fellows go by the name of 'Armajidaden and Mohammad'..<< and both have already been paid for their services..

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