NEWS UPDATES.

T.A.R.P. BAILOUT NEWS.

September 22nd, 2008 Historic numbers of foreclosures are sweeping the nation; the government steps in too late.  The Secretary Of Treasury, the Federal Reserve Chairman and the White House announced a 700 billion dollar bail out package for Wall Street firms that are collapsing because of the mortgage industry dilemma. Congress is pushing to make sure that taxpayers and struggling homeowners receive some benefits from this bail out while foreclosures continue to rise at alarming rates. 
 
OCTOBER 1ST 2008. Both Congress and the House pass the bailout bill, T.A.R.P.. [Troubled Asset Relief Program] The actual terms of this bill are not clear. We do know that this new bill is injecting billions of dollars into financial institutions to keep them from collapsing but how will this money reach homeowners? Several government officials are making reference that the new bill mandate and instruct lenders to keep homeowners out of foreclosure but to date, this has yet to be seen. This new bill will not automatically fix a homeowners current problem, the homeowner must take action. Short sales of homes are on the rise as foreclosures run out of control.

January 2009.    US Treasury Secretary Tim Geithner has delayed the release all the details of his Financial Stability and Recovery Plan until it goes before Congress. The framework of the plan is public.
 
First, there will be an injection of TARP funds [with strings attached] into banks/financial institutions. The FDIC will be given broad, new powers over large financial firms in trouble and govern how they spend the bailout monies; this will likely lead to bank closures/mergers into healthier companies. It also mentions that these banks have to have a foreclosure prevention plan to help homeowners.

Next, there will likely be a "bad" or "aggregator" bank to buy "toxic" assets from banks. The goal is to provide an avenue for banks to dump these assets and get out of the death spiral and start lending again and assisting homeowners facing foecsloure.

Then, there will be a foreclosure relief provision that will attempt to help homeowners who are either in foreclosure or close to going into it. This will involve Fannie Mae and Freddie Mac with the hope that other lenders will follow. The Treasury Department and Department of Housing and Urban Development worked with bank regulators to agree on standards for who could get relief and how they might coax other finance companies to follow their lead.

Lastly, the Federal Reserve is going to greatly expand their Term Asset-Backed Securities Loan Facility. This will be one of the better programs the Fed is going to run to help homes sell faster in short sale scenarios and  stop rising foreclosures. 

February 18th,2009.

President Obama and his economic team have made it clear that the U.S. government is going to make sure the 9 million homeowners facing foreclosure will have their mortgages reviewed. If these people are viable for a modification, their lenders will work with them and modifiy their loans, HOWVEVER, if the reviews reveal that homeowners acted irresponsibly and bought a home they truly could not afford, they will not get relief.

With all the billions of dollars the government is handing these banks, foreclosures continue to rise.

Now is the perfect time for struggling homeowners that cannot make their mortgage payments to approach their lenders and ask for a mortgage modification. Doing nothing has proven to be a fatal mistake for homeowners facing foreclosure. The government’s proposals are constantly bogged down in red tape and may take another year to provide relief, if any at all. NOW is the time for a homeowner to take action on their own!!