Today, new challenges to homeownership are emerging – challenges that not only keep families from buying homes, but increasingly prevent them from keeping the homes they have already bought. According a new study, 2.2 million families with non-traditional or “sub-prime” loans made since 1998 have faced or will soon face foreclosure because of mortgage lending practices that have been described as “predatory” in nature. These foreclosures will cost homeowners as much as $164 billion in lost wealth, mostly in home equity that has been or will be stripped away. For these consumers, the American Dream can truly become a nightmare.Read the full speech.
Thursday Update
posted by Tim Cullen, on January 25, 2007 - 3:20pm
Here's what Senator Dodd's been up to recently: Yesterday, Senator Dodd offered legislation in the Foreign Relations Committee to put teeth into a non-binding resolution which would force the President to seek authorization before any additional troops could be sent to police the civil war in Iraq.
While the legislation did not pass yesterday, the Senator hopes the Congress takes action when the debate comes to the full Senate. For blog coverage of the vote, see MyDD ("Good idea--this bill has actual teeth [...] Chris Dodd deserves props for proposing this legislation.")
Last night, the Senator gave a speech to the United States Conference of Mayors. In it, he touches on one aspect of his agenda for the Banking Committee. Here's an excerpt:
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Senator Dodd told us a couple of weeks ago he was running for President. Somehow amazingly he has found time to start campaigning, and he continues to roll up his sleeves and keeps rolling on in the senate working just as hard as ever. After spending the past 6 years with a President who has been a campaigner and chief, it will be nice and long over due to have a hard worker like Senator Dodd in the White House. Keep up the work Sir, it is paying off and people are taking notice with you and your vision for our country.
Rep. Patrick Kennedy says he will endorse and raise money for Senator Chris Dodd in his White House run. He did not say his dad would endose Dodd, but I think and hope when when his dad does endorse someone it will be Dodd. You can read the full story at www.ohiofordodd.blogspot.com.
Can't believe he said it.... "Usury"!
All I can say is that if Senator Dodd continues to take a stand against the Credit Card companies, this consumer is fully on board for his Presidential run.
It's high time someone starts demanding better of American corporations!
P.S. When will campaign gear be available??
There should be no taxpayer funded bailout for irresponsible people who took out loans that drove housing prices out of reach for responsible young families. I have watched in disbelief as flippers and other assorted speculators gambled on real estate the past five years. Now that they rolled the dice and got snake eyes, why should my tax dollars go to pay for it? We are deep enough in debt and do not need to spend another $500 billion to bail out these people.
Doesn't anyone understand that these bailouts and handouts are driving houses prices higher? That will only lead to more foreclosures in the future as young families will have to take out even bigger loans to buy a starter home. Stop the insanity NOW!
If people have indeed been the victim of predatory lending practices (e.g. being put in a loan program that was more costly than their credit or situation would warrant), then have the loan officer that put them in the questionable loan program bail the buyer out. Don’t penalize the taxpayer for the transgressions of the loan industry.
In addition, if a person’s credit situation were such that they could ONLY qualify for a sub-prime loan, then I would expect no help from the federal government if or when they default. If there is no indication that the home purchaser was not put into a more costly program than they could reasonably qualify for, why should the federal government be expected to bail them out?
The reason for the recent rise in Notices Of Defaults (NODs) is simple. People bought houses they couldn’t really afford, except by using teaser rate and ‘exotic’ loan products (Pay Option ARMs, Interest Only ARMs, etc.) with the expectation that real estate prices would forever go up. As long as prices kept going up, people could continue to refinance to a new ‘teaser’ rate or, in the worse case, sell the house for a big profit.
However, with house prices plateauing (or even declining), this strategy no longer works. Hence, all of the people that really couldn’t afford $500,000 houses in Los Angeles (except by playing the ‘appreciation game’) are now finding out the true costs of their mortgages.
This situation was exacerbated by the fact that people could get loans with no money down, no closing costs, and ‘cash back at closing’. We have actually come to the absurd situation where you have to have more money to rent a house (because of the required deposit) than to buy a house.
It is morally wrong to expect those of us that didn’t play the “appreciation game” (renters for example) to bail out those that did. If a person made the choice to buy a house that they could not reasonably afford, instead of rent, then they should take responsibility themselves if the housing market doesn’t work out as they planned. After all, if housing price appreciation continues, would we be looking to give renters a portion of the gains from the appreciation game to make up for the fact that they were “left out”?
- financially responsible
Senator Dodd:
Yes its' true if you are not enrolled in school. It's because of the FLSA people like me are being are falling behind the skills curve
We CANNOT afford to go to school and get enough credits so we can intern and get anything recent on our resume.
Plus this brings up age and sex discrimination, how many of us over 40 are "Recent College Graduates" versus a 22 year olds? Lots of ads want them young and dont care about EEOC rules.
What a great campaign issue to get Older Americans back to work. I would GLADY work for FREE for say 300 hours to relearn new skills. After 300 hours i would either start getting paid or would have to leave. Fair enough for me...so why not the government?
PS: I'M NOT TALKING A SOUP KITCHEN BUT ABC NEWS NIGHTLINE WHERE I KNOW TERRY MORAN, AND CYNTHIA MC FADDEN FROM MY COURT TV DAYS...
Email me if you want to talk to me.
Make no mistake, the ultimate beneficiaries of this proposed foreclosure bailout are the fat cat lenders who gleefully made high interest loans to "sub-prime" borrowers. Everybody gorged on the gravy train: lenders, cashing out borrowers, the commission-pocketing middlemen.
Lending standards were thrown out the window. Nobody cared while everybody was getting some cash. Lenders were happy to get the high-interest payments, HUGE returns on their dollars, and these BAD LOANS were repeatedly rolled over and over, with refinancings, and everybody cashed out repeatedly.
And now Sen. Dodd wants the taxpayers to foot the bill and be the bagholders at the end of this Ponzi finance chain.
This is the WORST idea I have heard of, for solving the problem of irresponsible finance. Let those who took the risks face the music. DO NOT ROB TAXPAYERS TO COMPENSATE THE JUNKIES.
I have been counting on home prices to come down so I can afford to purchase a home someday.
Now you are proposing intervention in the market to prop up prices by preventing foreclosures and thus a decline in home prices.
You also say you are also an affordable housing advocate. How does your proposal to intervene help increase affordable housing? How does this help those who do not currently own a home?
The war on the dollar continues. Our political choices are now limited to fascism or socialism. By all means, keep the corporate fascist money machine rolling.
Every time the government offers money, people will seek that money. If it profitable to be forclosed on, then that's will people will do. You think there are a lot of forclosures now...wait until the government starts subsidizing them. Housing prices will truly collapse.
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