June 24 average daily rates in Orange County for 30-year fixed loans with one-point fee: Conforming up to 6.078%, Jumbo up to 7.446% and Conforming-Jumbo up to 7.208% (Note: conforming-jumbo rates are for loans from $417,000 to $729,750, while conforming is up to $417,000 -- both types are sold to GSEs. Jumbos here are $730,000 or higher and not sold to GSEs.)
Source: Newspaper Chart Services 
OC Register calls on Bush to veto mortgage bailout
May 13th, 2008, 10:30 am · 28 Comments · posted by Matt Padilla, Register Reporter and Blogger
The Orange County Register’s editorial staff called on Bush to veto a housing bill recently passed by the U.S. House of Representatives if the bill proceeds largely unchanged, and perhaps even if it is changed significantly, in the Senate.
Please note: we journalists in the newsroom don’t necessarily share the opinions of the editorial staff. However, I found Monday’s editorial interesting fodder for a debate on this blog. Here are the key points made in the editorial:
- “The House bill as passed would create a $300 billion mortgage-insurance fund, give some first-time homebuyers a $7,500 tax credit, and send $15 billion to local governments to buy and fix abandoned homes.
- But this approach would take money from the vast majority of homeowners (in their role as taxpayers) who have not gone into default to aid a small minority who have gotten into trouble. Thus it would provide an ongoing incentive for irresponsible behavior.
- It has become fashionable to blame the mortgage crisis on “predatory” lenders who have aggressively pushed bigger mortgages than people can afford to pay onto hapless homebuyers. Insofar as some lending was fraudulent, appropriate legal remedies are readily available. It should be noted, however, that the government itself pressured lenders to make mortgage money available to people with marginal credit.
- The Constitution prohibits states from passing any “Law impairing the Obligation of Contracts” for the important reason that honoring contracts is essential to social stability and a functioning market economy. If Congress simply swoops in and changes the terms of contracts, the result will be less-stable markets and an increasing reluctance to extend credit to anyone but gold-plated borrowers.”
Anyway, the bottom line, according to the editorial, is let the market correct itself.
Related Links:
- U.S. House passes $300 billion mortgage bill opposed by Bush
- Pimco’s Gross says slash mortgage balances
- O.C.’s coming wave of prime foreclosures?
- Web voices unite against housing bailout
- Are banks next?
May 13th, 2008 at 10:49 am
this is so funny!!!
joe shmoe Says:
March 15th, 2008 at 9:04 am
I object to this because I belong to the Sacred Church of No Bail Outs and No Government Interventions. No one should ever change anything once it has been signed. It is religious principle. God says so. Government should never interfere. No police. No Fire department. No street cleaning. Everyone should just fend for themselves. Spending public money on anything - saving your child’s life with paramedics or paying for a court to cram down a mortgage and alter a contract - is but the first step to the apocalypse.
Don’t be fooled by people who study issues and do research. God’s will is that we claw each other to death.
No Bail Outs! Save No One! The Weak Were Made So That They Could Perish! One Person Who Hordes All The Money Is Stronger Than 200 Million People Who Band Together As A Society.
Oh. But please spend a few billion on missile defense projects that don’t work because they can be easily defeated by countermeasures. I own defense contractor stock, and I have a right to make money there.
Free Duke Cunningham!
No Bail Outs for Mortgage Holders!
Joe
Joe
May 13th, 2008 at 10:50 am
Nailed it on the head.
May 13th, 2008 at 11:26 am
I’ve sat back and saved for the past two years. Watched several people who make less than I do buy homes with little or no down. Why is the OC Register lumping the bailouts with us first time buyers? I’m sitting waiting patiently to buy responsibly, yet OC Register wants to nix first time buyers tax credits. Seems to me first time buyers are an important piece to the housing recovery puzzle. Stop smacking us down.
May 13th, 2008 at 11:36 am
Any government intervention would be a complete disaster. The Fed needs to raise interest rates. This will strengthen the dollar against foreign currency and lower the price of commodities. Also, by raising interest rates, the foreclosure process will speed up. This is the right thing to do for the economy. How long is the Fed going to keep rates artificially low??? By not delaying the inevitable foreclosures, we can flush them threw the market and get the economy back on track.
May 13th, 2008 at 1:15 pm
Lisa, if all first-time homebuyers were to get a lousy $7500 tax credit with the purchase of forclosed properties, how exactly is that going to help you? We shouldn’t give out free money to anyone, stop looking for handouts and let these speculators who drove prices up suffer. The best situation for all of us is for prices to correct back to affordable levels.
May 13th, 2008 at 1:26 pm
“The Constitution prohibits states from passing any “Law impairing the Obligation of Contracts” for the important reason that honoring contracts is essential to social stability and a functioning market economy. If Congress simply swoops in and changes the terms of contracts, the result will be less-stable markets and an increasing reluctance to extend credit to anyone but gold-plated borrowers.”
What if the original contracts or the TILA agreements were vague and fraudulent? I’m not endorsing the Frank-bill, but it is fact that many of the loan originators, the lenders, misled borrowers and didn’t disclose information that should have been clearly worded on TILA disclosure forms according to the Truth in Lending Act.
If you’d like to take the wait and see approach, have fun with the credit climate after prime borrowers face interest resets later this year and early next year. Again, prime borrowers with good credit were cajoled as well into teaser payment option loans, many not aware they were entering into a negative amortization loan, which is suppose to be stated (and was not) on TILA forms.
Anyway, I rent.
losangeles.injuryboard.com
May 13th, 2008 at 1:57 pm
Imagine that..the government trying to promote behavior (buying a home) by offering an incentive ($7500). Buying a home is no “worse” now than it was during the boom, when they didn’t have to dangle money out there but were also promoting an ownership society. The only thing different is you can’t count on continued high levels of appreciation right now.
May 13th, 2008 at 1:59 pm
Hey Lisa,
If you actually read the bill the aforementioned $7500 tax credit is really just a loan. It in fact, has to be paid back over the course of the next 5-7 years.
So your free money as a first time homebuyer is really just a temporary loan.
May 13th, 2008 at 2:24 pm
The Register is too wrapped up in its right-wing dogma. That same dogma led us into a disaster, this is just part of the repair.
May 13th, 2008 at 2:25 pm
Thank goodness the right-wing’s days are numbered. Good riddance!
May 13th, 2008 at 3:16 pm
For some reason comments are being blocked (says javascript or cookie error) on lansners blog but not matts.
May 13th, 2008 at 9:09 pm
I think it is a great idea to bailout homeowners with tax payer money, i think we should also retroactive compesate people who already lost thier houses. we are one society and should help each other.
May 13th, 2008 at 9:45 pm
Poor OC,
Too Bad. You Republican’s voted for George and the crook Chaney–and all those financial wizards, the free capitalist whose rule is to rip off the public, the mob, they who want and desire exorbitant profits. Like those of the Great Depression you fell into the pit and now you are sinking–too bad. You wanted deregulation and now you are reaping the results–this is the beginning. You’ve only seen the tip of the Titanic sinking–the ride is just starting. Vote for McCain you good Republican’s.
May 13th, 2008 at 9:57 pm
Forget about home buyers. There are MILLIONS of SUV owners who have seen the value of their vehicles decline due to gas prices. They can’t even trade in their cars for a Prius because they are so far underwater.
Please support the SUV Owners Preservation Act. It will give all first-time SUV buyers a $7500 tax break, give $15B to the states to buy up unwanted SUVs, and guarantee a minimum trade-in value for current SUV owners up to $300B. Finally, it will guarantee the car loans of all new SUV buyers with the full faith of the US govt.
Every American deserves to live the dream of owning an SUV, and this bill will help preserve that right.
May 14th, 2008 at 6:43 am
too funny
May 14th, 2008 at 7:43 am
I got better idea, they should tax all current homeowners a special tax rate to help other homeowners it should be prograssive according to the equity you have in your house who have more pay more to help those who can’t make a payment.
May 14th, 2008 at 11:16 am
Buy Houses now!
great idea!! too funny. Just bought a new car- SUV is still is still sittin in the driveway, pretty much worthless now.
May 14th, 2008 at 12:22 pm
Unfortunately, America is becoming way to liberal. Obama bin laden and Hilary will tax us to hell. If you aren’t a republican in these times, you are a fool!
May 14th, 2008 at 2:32 pm
Way to go Register!
Hey, if there’s no housing bubble, why do we need a bailout?
Funny how housing bulls can so easily contradict themselves. First they want to deny there is a problem (Look everyone! Sales are going up! We are turning the corner! Housing doesn’t ever go down…(much), Cheer, cheer, rah, rah, rah… GGOooo Housing!), but yet want a massive multi billion dollar tax subsidy essentially for people investing on housing one way or another.
It’s all about self-interest. It’s that simple. Those who have to gain from a housing decline (like myself who got priced out of the market just in the last few years) of course want the prices to correct. Those who don’t (investors, realtors perhaps) want everything done possible to keep it afloat.
I guess it is human nature which I really don’t have a problem with. We shall soon see in the next few years which side prevails. I just wish this whole thing could move a long just a little faster.
May 14th, 2008 at 6:30 pm
An idea (bailout) for our homeowners in trouble
Problem: People owe more then the property worth
Solution: Rebalance the equity among all the homeowners.
How: People who has a mortgage smaller then their house worth will be tax proportionally to the amount of equity he has every year. The money will go toward reducing the loans on houses that exceeds the house worth.
Problem: People have no incentive to buy
Solution: Give people without down payment an incentive
How: Additional tax will be add when a homeowner sell the house with a profit, this will go to cover a tax credit that will be given to first time owners as assistant with down payment.
I am sure Thoughtful and other homeowner will support such incentive
May 16th, 2008 at 8:38 am
Thoughtful,
What has led us here is corporate welfare (socialism for the rich). Profits are privatized and losses socialized. This is exactly what’s going on with Wall Street. Those guys are getting paid billions to destroy value.
The only politician who has warned us of this mess in advance is actually ron paul
May 18th, 2008 at 10:51 pm
As much as it pains me to agree with the President, he is right to veto this bill. Personal responsibility has to start somewhere and why not start by realizing that was YOUR blood ,sweat, and tears you wasted when you signed a ARM Mortgage you could neither afford or understood, and got stuck with later?
Let the next 2 million foreclosures go through. It’s hurts like h*ll for sure.When you hit rock bottom, the only way to go is UP.
May 20th, 2008 at 2:09 pm
[…] OC Register calls on Bush to veto mortgage bailout […]
May 26th, 2008 at 12:37 pm
Lets just bail out Bear Sterns, lets allow Exxon, Mobile, Chevron to keep making huge billion dollar profits during an energy crisis. Oh by the way many the people footing the bill are the same ones in a mortgage crisis, hmm. Lets keep spending billions on a mis guided war. Lets keep getiing our sons, daughters,husbands and wifes fathers and mothers killed along the way. Oh and if they are lucky to make it back from this tragedy, not allow them any special privileges either ,ie., college tuition credit or an enhanced GI bill. Lets keep paying more and more to drive the toll roads, oh and how about the money we are borrowing to finance ourselves, lets tell China we don’t need bailout money. Hell lets extend Bush’s term for another four years I am sure by that time he can get this thing turned around. Who knows, he may even have time to put some practices in place that would have not allowed for this mess to have happened in the first place.
June 1st, 2008 at 11:36 pm
Speculators should not be bailed out; it is unfair for those of us who waited to become homeowners. Many of the people cashed out equity spent it on toys and now want their balance to be written down to current market value. I feel bad for those that feel they got screwed, but it is our responsibility to understand everything we sign. No bail out!
June 18th, 2008 at 6:25 am
The constitution prohibts STATES, not the fed itself, from passing any law that compromises contracts. That said, the intent was to avoid discharging private debt with public funds I can’t think of any contract more private than a mortgage loan.
Propping up bubble asset prices using public funds mortgages will only prolong the pain. The forest is overgrown; only a burn will remove the deadwood and prepare the terrain for new growth.
It’s funny yet apalling how the loony left frames folks who executed extremely poor private decisions as victims of mortgage fraud. The United States is no longer a meritocracy, or even a democracy, but rather a victimocracy. Personal responsibility is passe. Time for a general strike a la Atlas Shrugged.
June 27th, 2008 at 1:51 pm
“Seems to me first time buyers are an important piece to the housing recovery puzzle. Stop smacking us down”
I agree, if lenders didn’t make bad loans to illegal gardeners the housing mess wouldn’t be half of what it has become. and said low-income people were idiots for taking the loans, but hey how could they not know what they were getting into? sweet deal for both sides, assuming buyer could afford the payments (they couldn’t) and/or the market kept going endlessly up, up, up! (it didn’t)
the rest of us future homebuyers are not one and the same.
June 28th, 2008 at 1:06 am
HEEELLLP!!!!!
Last year, I bought a Ferrari that I thought I could afford on my $40k salary.. Those crooks at the car dealer fraudulently convinced me that I could afford it! Now i cant make my payments and my credit is suffering..
Please, US Govt! Please take my neighbor’s tax money to pay off my Ferrari and charge me low payments so that I can keep it! I’d die if I had to drive a Toyota like my dumb neighbor who put all his money into his retirement fund!