Bush drops veto threat on mortgage aid bill
July 23rd, 2008, 8:39 am · 17 Comments · posted by Mathew Padilla, Reporter
(Update: The House passed the bill, and the Senate is expected to approve it later this week. For the full story, CLICK HERE.)
The Wall Street Journal reports that President Bush has dropped his threat to veto a housing and mortgage aid bill that would allow the government to insure up to $300 billion in refinanced mortgages.
House and Senate leaders have agreed on key terms of the bill, which would also bolster government-sponsored lending giants Fannie Mae and Freddie Mac, the Journal reports. Those two companies are just about the only ones buying home loans these days, which is why the government wants to ensure they don’t fail and that they have money to keep buying.
The Congressional Budget Office said Tuesday that shoring up Fannie Mae and Freddie Mac could cost taxpayers $25 billion.
The Journal’s Web Site quotes White House Spokesman Dana Perino as telling reporters, “We believe this is not the time for a prolonged veto fight but we are confident the president would prevail in one.”
Bush previously said he would veto the bill because he didn’t want to save reckless lenders or housing speculators.
The bill also includes $4 billion for local governments to buy and spruce up foreclosed homes.
It also would raise the conforming loan limit to $625,000 in high-cost areas like Orange County. The limit was $417,000, but Congress temporarily raised it to nearly $730,000 in high-cost areas — that raise expires at the end of this year.
Related news…
- How to fix the mortgage mess
- Experts say government keeping mortgage market afloat
- U.S. throws 2 mortgage giants a lifeline
- Should U.S.-backed mortgage giants be bailed out?
- Sen. Schumer raises concerns over IndyMac’s solvency
- Look who’s making subprime loans now
- Good credit, good job but still need mortgage aid? Maybe…
July 23rd, 2008 at 8:48 am
What a profound disappointment… all at the expense of taxpayers.
July 23rd, 2008 at 10:09 am
It should be sort of interesting to watch this “bailout” and how effective it is. For one, what happens when someone says in July, my house is only worth 400K now and not the 700K I paid in 2006. They refinance it, giving up all rights to equity appreciation and then next year the house is worth 300K. What then……refinance again?
The problem I have with the housing bill is that it does not fix the underlying problem…..that is that we have no confidence that home purchasers will be able to repay loans.
What is needed is a government mandated law on requirements to buy a home….30 % down payment, 35 % DTI and a 6 month cash reserve, along with full income documentation. If investors believed they were purchasing debt from this type of borrower, the markets would regain confidence.
July 23rd, 2008 at 10:28 am
Passingthis bill ELIMINATES a first time home buyer program that helps with the down payment for FHA loans and RAISES the down payment from 3% to 3.5%. Thanks a whole big bunch.
July 23rd, 2008 at 10:31 am
30% down payment?!?!?!!?!?!? It is nice if you have a house to sell and want to buy another one-but how about a first time buyer-you really think people have $90,000. laying around to buy a house?????
July 23rd, 2008 at 11:09 am
Taxpayer will get screwed anyways. If it’s not the housing bailout it would be Iraq or other stuff. At least this measure stabilizes the economy as opposed to billions spent in Iraq. Lanser and Padilla will have to up the ante to keep the negative sentiment. They would have to work harder at it to keep the prices down.
July 23rd, 2008 at 11:09 am
Your “Daily rate fix” is way off
July 23rd, 2008 at 11:31 am
Joe, I will update it today. But feel free to email me any future reminders. Let’s keep the comments on topic. Thanks.
July 23rd, 2008 at 11:45 am
More welfare for the rich! Over the last 20 years the US taxpayer has pumped a trillion dollars plus into the banks. I would think that the US Government would have representation on the Board of Directors of these institutions. Let the liar loans resume!
July 23rd, 2008 at 2:04 pm
Oh hell no.
July 23rd, 2008 at 4:14 pm
What nanowest said.
July 23rd, 2008 at 4:49 pm
My understanding is that the banks have already tightened up on underwriting – 20% down, DTI, and reserves are now clearly looked at hard.
This new bill will help increase confidence in Fannie and Freddie (and other financials), which in turn should bring down long term interest rates a few tenths, which in turn should help stabilize the housing market and the whole economy. Add on top of this the recent tightening of SEC and speculation rules and we can all worry a little less about our jobs going away.
Short of the money set aside to buy and clean up already foreclosed RE, why would anyone have an issue with an attempt to improve economic stability?
July 23rd, 2008 at 8:59 pm
Bush and all the other republicans should be imprisoned for treason.
July 24th, 2008 at 9:50 am
Talk about more irresponsible borrowing, our government needs to go seek credit counceling
July 29th, 2008 at 2:48 pm
We are becoming a European-style stagnant economy because of policies like these. But on the bright side, maybe they’ll spruce up Santa Ana with that foreclosure money!!