Elizabeth Warren Takes on Geithner re: Foreclosure Crisis

[amborin]

Elizabeth Warren Tackles Tim Geithner, FinReg and Car Dealers in 3 Clips


Elizabeth Warren has appeared on camera three times in the past 24 hours — and she still has a lot of fight left in her. First Warren took on Tim Geithner, repeatedly asking him for his “metric for success” in the HAMP program, meant to help families avoid foreclosure.
“Is it 120,000 families saved over 15 months at a time when 186,00 are posted for new defaults and foreclosures every month? Is that a successful program?” she asked. Tim didn’t have a response.


snip

Next in her crosshairs was financial reform...... We haven’t dealt with concentration, she says, nor have we dealt with derivatives, so we “continue to live with that risk.”

http://www.newdeal20.org/2010/06/23/elizabeth-warren-tackles-tim-geithner-finreg-and-car-dealers-in-3-clips-13208/

[laughingliberal]

1. Bless her heart for trying. nt

[geckosfeet]

2. I love that woman

[geek tragedy]

3. The foreclosure problem is really not capable of being 'solved'

If people don't have jobs and can't pay their mortgage, they're eventually going to get foreclosed on. The only way out is to find people jobs. All the other stuff is just window dressing.

[Cant trust em]

5. Except that many people who are being foreclosed on have jobs.

A lot of people hit by the subprime crisis are employed, but their clever option ARM lending instruments have reset and now they can't afford the payments. Not having a job isn't a problem for these folks.

[geek tragedy]

7. ARM resets generally only bite people if they bought too much

house to begin with. Rates are incredibly low right now so garden variety ARMS (as opposed to interest only or neg am loans) aren't forcing anyone into bankruptcy.

[Cant trust em]

11. That may be true, but it's not because they are unemployed that they're having trouble

which your OP seems to indicate.

[geek tragedy]

13. People fail to make mortgage payments for a variety of reasons.

Loss of job, other monetary losses (everything from medical bills to gambling addiction), divorce, etc. Nowadays the foreclosure trend is exacerbated by the unprecedented number of people who didn't put any equity in their homes (100% financing) or are otherwise underwater--such people have more of an incentive to just walk away than people who sank 20% into a place.

[sandnsea]

6. People have to live somewhere

If they would just put the houses at a reasonable price with a reasonable interest rate, most problems would be solved. They just won't do that. They're actually raising the principle on people and putting them back in no interest loans. It's crazy.

Sometimes people do end up homeless due to job loss, no question. But not most of the time. They have to come up with money to live in their rental too.

[geek tragedy]

8. There are also a lot of people who were given loans for

more than they should have borrowed. Not their fault--their trust was abused by banks--but a lot of the negative amortization loans were given to people for overpriced properties with the assumption that they would appreciate in value so the people could refi before the rates reset.

[amborin]

10. here's a foreclosure ....$126K

probably a first time starter house, they simply fell behind.....

http://hotpads.com/foreclosures/Osborne-Street-97-Pacoima-CA-91331--40492sv8skdfe#lat=34.261&lon=-118.405&zoom=20&previewId=22896819_ForeclosureDotCom&previewType=listing&detailsOpen=true&listingTypes=foreclosure&pricingFrequency=once&loan=30,0.0525,0&visible=new,viewed,favorite

[sandnsea]

21. They probably offered a $190,000 no interest

and then wondered why the people refused to accept the modification.

[Cant trust em]

12. I feel like there are 3 sides of responsibility for the housing bubble

1. Developers who overvalued the homes
2. Banks who were too willing to provide creative financing for people to get them into a home.
3. Consumers who bought into the mania and purchased homes that they might not have been able to afford.

[geek tragedy]

15. There's a big #4

Wall Street firms who were eager to buy up high interest rate mortgages and chop them up into high risk/high yield bonds. Since banks could sell loans to firms like Lehman and Bear at a sweet profit, why not originate them since they'd be 'selling the risk?' That was the theory anyways.

Of course, greedy investors chasing big yields are also to blame--the Lehmans and Bear Stearns type firms wouldn't have bought those loans if they didn't have customers to sell the CDOs to.

[Cant trust em]

16. Yes. I'm glad to see the provision in the fin reg bill

that would require banks to keep 5% of the loan after it gets packaged.

At least that's how I understand it.

[geek tragedy]

17. Is that both for whole loan sales and securitizations?

(Whole loan is where they just sell the loan, securitization is when they chop it up into bonds)

[Cant trust em]

18. Sounds like the securitization.

http://www.lanewsmonitor.com/news/Relief-for-Auto-Dealers-In-Wall-Street-Bill-1277324329/

[amborin]

20. excellent point; GS, e.g., knew they were risky but packaged, chopped, & sold them off nonetheless

[laughingliberal]

22. That might more appropriately be #1. nt

[madrchsod]

4. my county...the hometown of st ronald on the horse....

has been hammered in the last two weeks with foreclosures.the most i`ve seen in two years.the county where he was born has at least 10 foreclosure a month for the last two years.

reaganomics did`t work in the 80`s and it still is`t working today

[Catshrink]

9. Meanwhile the rich got richer by 17% in 2009

World’s rich got richer in 2009
India, China and Brazil see fastest growth in wealth
By Joseph A. Giannone

updated 7:31 a.m. MT, Tues., June 22, 2010
NEW YORK - The rich grew richer last year, even as the world endured the worst recession in decades.

A stock market rebound helped the world's ranks of millionaires climb 17 percent to 10 million, while their collective wealth surged 19 percent to $39 trillion, nearly recouping losses from the financial crisis, according to the latest Merrill Lynch-Capgemini world wealth report.

Stock values rose by half, while hedge funds recovered most of their 2008 losses, in a year marked by government stimulus spending and central bank easing.

<snip>

In North America, the ranks of the rich rose 17 percent and their wealth grew 18 percent to $10.7 trillion.

http://www.msnbc.msn.com/id/37846803/ns/business-personal_finance/

[laughingliberal]

14. $75 billion given for this &, once again, the banksters gamed the system & helped very few.

To which Geithner shrugs his shoulders and shows no concern for the homeowners.

[girl gone mad]

19. Wish they had listened to her and other true experts in the first place.

As I recall, they were warned that this program would result in failure, cramdowns would have been better, HAMP did nothing to address the root causes.

Of course, easier to just call critics "doomers" and later proclaim "hoocoodanode?" than to do any real analysis and implement solutions which might harm the banks a little.

[laughingliberal]

23. That's my assessment of it.

Some of the money the banks gamed the system with could have been used to pay down principle for homeowners which would have helped. Instead, the banks pocketed the money, helped few, foreclosed on the homes and resold them. I call that double dipping.