econintersect.com
  • 토토사이트
    • 카지노사이트
    • 도박사이트
    • 룰렛 사이트
    • 라이브카지노
    • 바카라사이트
    • 안전카지노
  • 경제
  • 파이낸스
  • 정치
  • 투자
No Result
View All Result
  • 토토사이트
    • 카지노사이트
    • 도박사이트
    • 룰렛 사이트
    • 라이브카지노
    • 바카라사이트
    • 안전카지노
  • 경제
  • 파이낸스
  • 정치
  • 투자
No Result
View All Result
econintersect.com
No Result
View All Result

Money Meant to Help Homeowners May Instead Pay Down National Debt

admin by admin
8월 27, 2011
in 미분류
0
0
SHARES
0
VIEWS

houses-underwater Econintersect:  When the TARP (Troubled Asset Relief Program) was passed and signed into law in the fall of 2008, $45.6 billion was designated to aid homeowners.  Any money in the TARP which was not used was specified to pay down the national debt.  According to ProPublica, only about $2 billion has actually been spent to date.  Additional money has been committed but has not actually yet gone out the door.  ProPublica quotes a Treasury spokesperson who said the government is on track to eventually spend a total of $7.2 billion on committed programs.There is some disagreement about exactly how much of the homeowner aid money is being or has been spent.  This week The New York Times reported that $22.9 billion had been spent or pledged to help homeowners with mortgages.  This is more than $15 billion more than the ProPublica number.  The NYT article said that 1.7 million homeowners have been helped with government supported loan modifications.  The Times did not indicate how many of those mortgage rescues actually “stuck”, i.e. did not still go on to default after the modifications.  Nearly a year ago it was reported that 11% of federally sponsored mortgage mods went on to later default anyway (newsytype.com).

The biggest problem with doing mortgage mods is the millions of homeowners (more than 11 million according to the Huffington Post earlier this year or 14 million on March 31 according to Deutsche Bank in a Bloomberg article) who are underwater on their loans – i.e. owe more than the house is worth.  It’s interesting that Deutsche Bank projects things will get even worse with 25 million mortgages eventually going underwater.  To refinance one of the following three things must happen:

  1. The homeowner must bring cash to the refinance closing and roll into a lower mortgage balance;
  2. The lender must agree to a write down of the principal in the refinanced mortgage; or
  3. A third party (government) pay the missing capital.

With mortgage modification programs reaching only a small fraction of the more than 11 million (or 25 million) homeowners not eligible to refinance the full principal of the current mortgage, one wonders why the TARP mortgage relief funds cannot be used as intended.  There is certainly a need as shown in the following graph from the NYT:

mortgage-rates-2011-8-27

Editor’s note: Not only do millions face having to pay more principal than their house is worth, they are stuck with interest payments much higher than the 3.5% to 4.25% available this week.  Couldn’t the housing market be stabilized sooner and at much less ultimate cost if a larger number of these 11 million were kept in their homes making payments on a reduced obligation?

Sources:  ProPublica, The New York Times, Huffington Post, Bloomberg and newsytype.com

Previous Post

Ben Bernanke Jackson Hole Speech Does Not Say QE3 Is Coming

Next Post

Interpreting the St. Louis Fed Stress Index

Related Posts

Bitcoin Is Finally Trading Perfectly Like 'Digital Gold'
Economics

Bitcoin Is Finally Trading Perfectly Like ‘Digital Gold’

by admin
Namibia Will Regulate And Not Ban Crypto With New Law
Finance

Namibia Will Regulate And Not Ban Crypto With New Law

by admin
6,746 ETH Valued At $12M Was Just Burned
Economics

6,746 ETH Valued At $12M Was Just Burned

by admin
Bitcoin Is Steady Above $29,000 Awaiting US NFP Figures
Economics

Bitcoin: What Next After Consolidation Ends?

by admin
US Government Offloads Another 8,200 Bitcoin – On-chain Data
Economics

US Government Offloads Another 8,200 Bitcoin – On-chain Data

by admin
Next Post

Interpreting the St. Louis Fed Stress Index

답글 남기기 응답 취소

이메일 주소는 공개되지 않습니다. 필수 필드는 *로 표시됩니다

Browse by Category

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized

Browse by Tags

adoption altcoins bank banking banks Binance Bitcoin Bitcoin market blockchain BTC BTC price business China crypto crypto adoption cryptocurrency crypto exchange crypto market crypto regulation decentralized finance DeFi Elon Musk ETH Ethereum Europe Federal Reserve finance FTX inflation investment market analysis Metaverse NFT nonfungible tokens oil market price analysis recession regulation Russia stock market technology Tesla the UK the US Twitter

Categories

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized

© Copyright 2024 EconIntersect

No Result
View All Result
  • 토토사이트
    • 카지노사이트
    • 도박사이트
    • 룰렛 사이트
    • 라이브카지노
    • 바카라사이트
    • 안전카지노
  • 경제
  • 파이낸스
  • 정치
  • 투자

© Copyright 2024 EconIntersect