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09-14-2009
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 Obama's "Home Affordable Modification Program" hooked it up for the Upper Class! Below is the Modification guidelines for the bail out. And The Upper class homeowner's are the only benificiaries. Is that good or bad for lower and middle class homeowners? Here what Obama say's at Congressional Black Caucus meeting. *** Parental Advisory Highly Suggested  YouTube - ALC '08: Sen. Barack Obama Home Affordable Modification Program Guidelines March 4, 2009 ..."Treasury's Program covers mortgages that are in default, or in imminent default, within the FHFA conforming limit of $729,750 on owner-occupied homes." story below... Trial loan modifications consistent with these Guidelines may be offered to homeowners beginning on this date, March 4, 2009, and may be considered for acceptance into the Home Affordable Modification Program upon completion of the trial period and other conditions. These Guidelines, however, do not constitute a contract offer binding on the Department of the Treasury.
Poorly Targeted The Administration and the Senate Republicans are proposing to accelerate rate reductions in every one of the upper-income tax brackets — the 28 percent, 31 percent, 36 percent, and 39.6 percent brackets — at a ten-year cost of $121.5 billion, according to the Joint Committee on Taxation. By contrast, the House-passed bill would accelerate only the scheduled rate reductions in the 28 percent bracket, at a ten-year cost of $53.7 billion. Less than one-quarter of the costs associated with either of these proposals would be incurred in 2002, when the economy will be in need of short-term stimulus. The remaining three-quarters of the costs would occur after 2002 — that is, in years when forecasters expect the economy already to have recovered.
Ineffective Stimulus
According to the Congressional Budget Office, only 23 percent of tax filers pay income taxes at the 28 percent rate or higher. Thus, even the House proposal to accelerate just the 28 percent rate would exclusively benefit the top one-quarter of taxpayers — not middle-income taxpayers, as the supporters of this proposal frequently claim. Accelerating all the rates is even more skewed to those with the highest incomes. Some 55 percent of the benefits of accelerating all of the rates would go to the wealthiest one percent of taxpayers, according to the Citizens for Tax Justice. Current Marginal Tax Rates and the Administration's Proposal
Only a very small share of tax filers have incomes high enough to be subject to the highest marginal income tax rates. IRS data show that in 1997, the latest year for which this information is available:
Acceleration of Upper-Bracket Rate Reductions Would Be Costly and Ineffective as a Stimulus Measure, 11/12/01 http://www.ustreas.gov/press/release...guidelines.pdf Details of Obama's mortgage plan released - Will you benefit Today the Obama administration officially released the final details of the mortgage plan that was announced a few weeks ago. Here is a quick summary on what is in the plan and how homeowners can find out if they are eligible for a new loan. As previously stated, there are two portions to the plan. One portion allows non-delinquent homeowners who have underwater mortgages to refinance to a lower rate, and the second portion allows delinquent homeowners to get a loan modification. Here are the general guidelines. Making Home Affordable Refinance Guidelines
Ocwen, Leading Subprime Mortgage Servicer, Begins Modifying Mortgages Under Government's New Program Apr 13, 2009 (GlobeNewswire via COMTEX) -- OCN | Quote | Chart | News | PowerRating -- e> Scalable Technology Enables Servicer to be Among First to Execute Treasury's Wide-Sweeping Plan to Prevent Foreclosures Ocwen Embraces President Obama's Bold Loan Modification Initiative as Key to Curing Housing Crisis WEST PALM BEACH, Fla., April 13, 2009 (GLOBE NEWSWIRE) -- Ocwen Financial Corporation (NYSE:OCN), a leading servicer of subprime mortgages, is among the first servicers (if not the first) in the country to begin executing loan modifications under the U.S. Treasury Department's new Home Affordable Modification Program. The expansive initiative, the contractual details of which are still being developed, is designed to help three to four million distressed homeowners avoid foreclosure by reducing their monthly mortgage payments. Even though the form servicing contracts have not yet been provided, Treasury invited servicers ready to adopt the Program to do so, given the exigencies of the foreclosure crisis. Ocwen was able to very quickly adapt its already robust modification initiatives to be compliant with the government's Program because the company's Home Retention Consultant staff is enabled with a highly automated, scalable loan servicing platform. Said Ocwen Chairman William C. Erbey, "We're proud to be able to aggressively implement the President's plan, which we support and are committed to helping make a success." In a letter to President Obama, Mr. Erbey wrote, "On behalf of Ocwen Financial Corporation, I applaud you, Secretaries Geithner and Donovan and your economic team on the adoption of . . . a sweeping loan modification program to assist homeowners with unaffordable mortgages and prevent avoidable foreclosures. We share your view that loan modifications are the key for a lasting solution to the daunting foreclosure crisis -- a crisis that lies at the very heart of our nation's economic problems and threatens millions of families with the loss of their American Dream -- their home. We fully support your new Plan and will work hard to help make it a success." Ocwen's President Ronald M. Faris added, "We were well positioned for a vigorous launch of this new government Program. Since the outset of the mortgage crisis, we have increased key staffing by over 65%. Our modification processes required very little tweaking to comply with Program guidelines." Government Program Guidelines Consistent with Ocwen's Customized, Win/Win/Win Approach Treasury's Program covers mortgages that are in default, or in imminent default, within the FHFA conforming limit of $729,750 on owner-occupied homes. Participating servicers must reduce monthly payments on those loans to no more than 31% of the homeowner's monthly gross income so long as the modified loan provides more cash flow to the loan owner than what would be realized in a foreclosure. The reduced payments are to be achieved through interest rate reductions, extended amortization terms and/or principal forbearance or forgiveness. Servicers will receive an up-front incentive fee of $1,000 for every modification under the Program, plus a $1,000 success fee for each year that modified loan stays current, for up to three years. Borrowers receive a principal reduction of $1,000 per year for staying current for up to five years. "The Program guidelines are very similar to the customized modification approach we had already adopted," Mr. Erbey said. In an appearance at a Congressional hearing in February, he explained that "Loan modifications crafted in this way are consistent with our contractual obligations and result in a win/win/win solution for all involved. The homeowner keeps their home; the loan investor avoids a substantial loss; and the loan servicer retains the loan in its servicing portfolio. Since the inception of the crisis, we have saved over 90,000 homes from foreclosure." He also pointed out that an industry study by Credit Suisse showed that, for investors, "Ocwen's loan modification program generates the highest cash flows by any servicer on 90+ days delinquent loans -- an amount that is twice the industry average." Said Mr. Faris, "We particularly like the 'imminent default' feature of the Treasury Program guidelines. Not having to wait until a homeowner is several months behind permits the servicer to proactively head off a serious delinquency in its incipiency, with far greater sustainability results. By using this same approach with our customers, Ocwen's Early Intervention staff was able to avoid over 9,000 foreclosures last year." The customized loan modifications that Ocwen engineers have a re-default rate of 24% after six months, compared to an industry average 41% for loans serviced for third parties according to the most recent report issued by the OCC and OTS. Ocwen's Approach to Heavy Volumes of Delinquencies Over the past 10 years, Ocwen has invested more than $100 million in designing and refining its REALServicing(r) and REALResolution(r) systems. The technology uses artificial intelligence, rules-based systems, scripting engines and net present value cash flow algorithms to enable Ocwen to apply common elements quickly across a range of modifications, while still allowing for an analytic approach to individual loans. Ocwen has also established a Psychology Department, staffed with academics, to help the company's loan analytics experts integrate behavioral sciences into decisioning models. "The goal here is to remove variability from key processes and make interactions with distressed customers more effective so we can reach successful resolutions faster. The scalability of our technology also allows us to take on many multiples of the volumes of delinquencies we have already cured in our portfolio," Mr. Erbey said. Obama Rescue Plan Said to Be Limited to Homeowners Most in Need Share | Email | Print | A A A By Dawn Kopecki March 4 (Bloomberg) -- The Obama administration intends to limit the loan-modification portion of its $75 billion mortgage rescue plan to homeowners who have lost jobs, suffered a pay cut or face higher mortgage payments, according to two people briefed on the program. Treasury and housing officials, who announced the plan Feb. 18, are scheduled to release terms today. The program will lean heavily on government-seized finance companies Fannie Mae and Freddie Mac and require strict verification of financial hardship, said the people, who declined to be identified because details were still private. President Barack Obama’s initial proposal, the biggest federal foray into real estate since the Great Depression, ignited criticism from Republican lawmakers that the government would be subsidizing homeowners financially capable of surviving the economic slump on their own. The plan is being refined to better assess homeowners in need, the people said. “The industry is waiting to see the final plan,” said Faith Schwartz, executive director of the Hope Now Alliance, a group of mortgage lenders and servicers created at the behest of former Treasury Secretary Henry Paulson to increase loan modifications. “People want a uniform plan that is sustainable.” Nicholas Strand, a mortgage-bond analyst in New York at Barclays Capital Inc., has said the limited details of the plan make it difficult to evaluate. National Standard The administration will outline a national standard for loan modifications as well as the program’s eligibility requirements and process for applying for aid, according to the Treasury’s Feb. 18 announcement and the people briefed on the plan. Borrowers who qualify may be able to lower their mortgage payments to as little as 31 percent of monthly gross income. “You’re going to see a pretty good level of detail around safeguards and protections on eligibility and how we’re going to enforce those,” Treasury Secretary Timothy Geithner said during a hearing before the House Ways and Means Committee yesterday. The Obama plan is divided into two main parts: helping about 4 million homeowners who are at risk of foreclosure to lower their monthly payments by modifying loan terms; and using Fannie and Freddie to refinance the loans of about 5 million Americans who owe more than their homes are worth. The administration’s hardship requirements would apply only to borrowers seeking modifications, not refinancings. Obama is seeking to help as many as 9 million Americans lower their mortgage payments to curb a jump in foreclosures. The U.S. housing market lost $3.3 trillion in value last year, and almost one in six owners with mortgages owed more than their homes were worth, according to a report last month by Zillow.com. Record Foreclosures A lack of credit and the record foreclosures are pushing property values even lower and keeping prospective buyers out of the market. Sales of previously owned homes, which account for about 90 percent of the housing market, fell in January to the lowest level since 1997, according to the National Association of Realtors. New-home purchases, which make up the rest, plunged to the lowest since the Commerce Department began keeping records in 1963. For loan modifications, the Treasury will share the cost when lenders reduce monthly payments by forgiving a portion of the borrower’s mortgage balance, the government said. Companies that service mortgages will get $1,000 for each modified loan, and as much as $1,000 annually for three years when the borrower stays current, the government said. Homeowners also are eligible for $1,000 annually for five years for remaining current, according to the plan. The cash will be applied to reducing the principal balance of the loan, according to a White House fact sheet. Industry Payments Mortgage servicers will get $500 and loan holders $1,500 to modify loans as an incentive for the industry to seek out borrowers at risk of falling behind on their payments. The second part of the plan will have Fannie and Freddie refinance loans that the companies own or guarantee, without new appraisals. The government-run mortgage finance companies, seized by regulators in September, own or guarantee $5.2 trillion of the $12 trillion residential home loan market. All institutions that receive future federal aid through the Treasury’s $700 billion Financial Stability Plan will be required to offer loan modifications. “Servicers are ready for it,” Sheila Bair, chairwoman of the Federal Deposit Insurance Corp., said in a speech yesterday, referring to the national loan-modification standard. “Even some of the investors are starting to soften up.” Mortgage-bond investors “that have been a pocket of resistance in the past” are beginning to see the merits of the plan, Bair said. To contact the reporter on this story: Dawn Kopecki in Washington at dkopecki@bloomberg.net. Last Updated: March 4, 2009 00:00 EST Obama Rescue Plan Said to Be Limited to Homeowners Most in Need - Bloomberg.com OCN Ocwen, Leading Subprime Mortgage Servicer, Begins Modifying Mortgages Under Government's New Program: Save Home USA The Obama administration today released more details on its $75 billion loan modification program. - Bing
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