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Former major league baseball player Jose Canseco…”said on Thursday he had lost his California mansion to foreclosure — one of the first celebrities to publicly admit being a statistic in the U.S. housing crisis,” the Associated Press said.
In comments to the TV show “Inside Edition,” Canseco says, “It didn’t make financial sense for me to keep paying a mortgage on a home that was basically owned by someone else.”
More from the Associated Press: “Canseco, 43, one of the most flamboyant U.S. baseball players until his retirement from the major leagues in 2001, told the celebrity TV show ‘Inside Edition’ that it did not make financial sense to keep his 7,300-square-foot home in the Los Angeles suburb of Encino. ‘Inside Edition’ said it had foreclosure documents showing Canseco owed a bank more than $2.5 million on the house.
What part of the housing crisis is he a portion of? He had the means to pay the mortgage but chose not to.
MM points out:
political rhetoric absolving borrowers of their responsibilities — and encouraging them to spend, spend, spend even more — has made it possible. And so has federal legislation intended to “help.” The omnibus spending bill passed last year prevents the IRS from taxing mortgage forgiveness as income up to $1 million for a two-year period. Some people are bailing because they’ve lost equity and value in their properties; some are bailing for cheaper homes in the same neighborhoods. There’s even a term that’s become popular over the last couple of years — “Jingle Mail” — that describes when homeowners cut loose and mail in the keys to the bank. Ho, ho, ho. The true victims in this “crisis” are those who paid for homes within their means and those who waited to enter the housing market.
As she was typing that, the House of Representatives Financial Services Committee on Thursday approved a sweeping bill to enable the government to finance $300 billion in distressed mortgages with the aim of helping 2 million homeowners.
The legislation, approved by a 46-21 vote, would provide an infusion of capital and new mandate for the Federal Housing Administration to guarantee home loans when a property has sunk in value since the mortgage was written.
Lenders would have to erase a portion of the original loan in order to secure a government guarantee on future payments.
Here are some of the highlights of that:
Eligibility Requirements for Existing Loans (Requires All of the Following):
- Owner-occupied principal residences only (no investors, speculators or second homes), and borrowers must certify that they do not own any other homes;
- Existing senior loan being refinanced must have been originated on or before December 31, 2007;
- To remove any incentive for borrowers to “purposely default,” the borrower must have had a mortgage debt-to-income ratio of no less than 35 percent as of March 1, 2008, and must certify that he/she has not intentionally defaulted on existing mortgage(s) and did not obtain the existing loan fraudulently;
- Participating mortgage holders/investors must waive any penalties or fees on the existing mortgage and must accept proceeds of the new loan as payment in full; and
- Existing mortgage holders/investors must accept their losses – taking substantial write-downs sufficient to: (1) establish a 3 percent loan loss reserve for the FHA; (2) pay the origination and closing costs for the new loan up to 2 percent; and (3) bring the loan-to-value ratio on the new FHA-guaranteed loan down to no greater than 90 percent of property’s current appraised value, resulting in a substantial reduction in debt service to the borrower. Accordingly, to qualify mortgage holders would need to accept a substantial write-down, accepting as payment in full no more than 85 percent of the property’s current appraised value.
Requirements for New FHA-Insured Loans:
- New FHA loans must be properly underwritten and must be based on current appraised value of the house and borrower’s documented income (borrowers with higher – but not disqualifying – debt levels would need to make six months of timely payments at the new payment level to qualify for the guarantee);
- New FHA loan must extinguish all existing liens and substantially reduce the borrower’s mortgage debt service;
- New FHA loans under this program must be within the FHA loan limits now in effect under the stimulus for the duration of this program;
- Oversight Board will set reasonable limits on loan fees and interest rates; and
- To reduce costs to the government – and avoid inappropriate enrichment to the borrower – the government will retain a share of the borrower’s future profits. When the borrower sells the home or refinances the loan, the borrower will pay from any profits the higher of (1) an ongoing exit fee equal to 3 percent of the original FHA loan balance; or (2) a declining percentage of any net proceeds attributable to home appreciation (i.e., from 100 percent in year one to 50 percent in year four and thereafter minus the fees the borrower has paid into FHA).
Trackposted to <a href=”http://poohflingingneocons.blogspot.com/2008/05/is-it-just-me.html”>Pooh Flinging NeoCons</a>, <a href=”http://www.themadpigeon.com/diary_of_the_mad_pigeon/2008/05/thursday-open-r.html”>Diary of the Mad Pigeon</a>, <a href=”http://rosemarysthoughts.blogspot.com/2008/05/to-all-enemies-of-usa.html”>Rosemary’s Thoughts</a>, <a href=”http://allieiswired.com/archives/2008/05/allies-wired-hot-links-79/”>Allie is Wired</a>, <a href=”http://www.womanhonorthyself.com/?p=4987″>Woman Honor Thyself</a>, <a href=”http://mccainblogs.com/2008/05/02/mccainiac-weekend-linkfest-sticky-52-54/”>McCain Blogs</a>, <a href=”http://righttruth.typepad.com/right_truth/2008/05/you-cant-fact-1.html”>Right Truth</a>, <a href=”http://www.anniemayhem.com/cgi-bin/wordpress/?p=1401″>The World According to Carl</a>, <a href=”http://www.thepiratescove.us/2008/05/02/pirate-weekend-linkfest-sticky-post-5254/”>Pirate’s Cove</a>, <a href=”http://thepinkflamingo.blogharbor.com/blog/_archives/2008/5/2/3671428.html”>The Pink Flamingo</a>, <a href=”http://caosblog.com/7752″>Cao’s Blog</a>, <a href=”http://wolfpangloss.wordpress.com/2008/05/01/mayday-poem-and-open-trackbacks/”>Wolf Pangloss</a>, <a href=”http://www.dequalss.com/wp/2008/05/02/columbia-free-trade-agreement-made-simple/”>Democrat=Socialist</a>, <a href=”http://www.anewtone.com/2008/05/war-news-idiots-of-mission-accomplished.html”>A Newt One</a>, and <a href=”http://www.yankeesailor.us/?p=709″>The Yankee Sailor</a>, thanks to <a href=”http://www.linkfests.us”>Linkfest Haven Deluxe</a>.
<a href=”http://www.linkfests.us/”><img src=”http://photos1.blogger.com/blogger/307/106/320/linkfest.jpg” alt=”Linkfest Haven, the Blogger’s Oasis” /></a>
35 Responses to “About Those Foreclosure Statistics”
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…
It is worthless to paid money if anyone own the property. and the information about Home loan that post in here it is helpful. Thank you for posting this post.
From the mind of Jose.
CRIPES!!!!
THE D=S STORE HAS BEEN UPDATED!
Now stop drooling like a slack jawed yocal and go on over and buy something! Those new mud tires aren’t gonna buy themselves you know!
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