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Originally posted by homer5

The so called housing bailout bill overwhelmingly passed in the Senate. It isn't a homeowner bailout bill, it's a bank bailout bill. What's worse is the blatant corruption on the part of Chris Dodd, an author of the bill. He got a sweetheart deal from Countrywide for his personal mortgage under Cwide's "VIP" program. In return Dodd is serving up this sweetheart deal for lenders.

The long and the short of the deal is if banks agree to a 15% haircut on the loan the government program will allow the homeowner to refinance. If the refi'd loans go bad, the taxpayers pick up the tab which is anywhere from 300 billion to trillions.

What's worse, the banks have the incentive to pawn off their worst paper to the taxpayers. Normally the haircut banks would receive is in the 35-40% range. This as opposed to 15%, thus the sweetheart deal.

Call or email your Congress Criminal in opposition to this bill. Write a letter to the editor of your paper. Or you can sit back and bailout the banks and make your neighbor's mortgage payment.

From the National Review...

http://tinyurl.com/3pnwbu

Countrywide Corruption

By the Editors

The U.S. Senate is about to enact a massive subsidy for Countrywide Financial less than a week after revelations that the company’s “Friends of Angelo” sweetheart-loan program included two U.S. senators. It seems unthinkable, but it’s true. What’s worse? One of the two senators sponsored the bill.

The principal author of the Dodd-Shelby housing-bailout bill is Sen. Christopher Dodd, a Connecticut Democrat who chairs the Senate Banking Committee, which has jurisdiction over the mortgage market. Last week, Portfolio magazine revealed that Dodd was one of two U.S. senators who benefited from a program under which Countrywide Financial gave loans at favorable terms to the influential and the powerful. The other senator was Kent Conrad, a Democrat from North Dakota.

The allegations against Conrad are damning enough. Though he denies having known he received preferential treatment, Conrad admitted to a Wall Street Journal reporter that he called Countrywide CEO Angelo Mozilo to ask for a loan on the advice of former Fannie Mae CEO Jim Johnson, another beneficiary of the program. (Johnson resigned from Barack Obama’s running-mate vetting team after his involvement in the program was revealed.)

But as powerful as Conrad is, the allegations against Dodd are more disturbing because he wields so much power over Countrywide’s fortunes and because he has used that power to benefit Countrywide. According to Portfolio’s calculations, the preferential loan rates Dodd received on two mortgages could end up saving him $75,000. (Like Conrad, Dodd denies knowing that he received preferential treatment.)

The troubling nature of this arrangement becomes clear when one looks at the fine print of the Dodd-Shelby housing bill. Under the bill, mortgage lenders — of which Countrywide is the largest in the U.S. — would agree to renegotiate their most troubled home loans in exchange for a federal guarantee on those loans. If the borrowers who took out those troubled loans end up defaulting, the government would cover any losses the mortgage lenders incur.

Under the Dodd-Shelby bill, a fee collected from the government-sponsored enterprises Fannie Mae and Freddie Mac would fund this program. The House version of the bill would fund the program with tax dollars. Either way, the program would be “a government buyout of problem mortgages disguised as a refinancing plan,” as David C. John of the Heritage Foundation puts it in his analysis.

Defenders of Dodd’s bill insist that it’s not a bailout, because the lenders have to write down 15 percent of the value of a troubled loan in order to qualify for the program. The lenders, they insist, are taking a loss and bearing the consequences of the irresponsible lending in which they engaged during the housing boom.

But this argument omits the fact that if a troubled loan goes into foreclosure — a most likely destination for many of them — the lender faces an average loss of one-third of the value of the loan. Faced with this kind of loss, many lenders have an incentive to work something out with borrowers anyway, and many already have, taking advantage of the Bush administration’s voluntary Hope Now program to do just that.

The kind of loans that lenders would dump on the government under the Dodd-Shelby bailout would be the most radioactive on their books — the ones likely to default anyway. So concluded the Congressional Budget Office, which found that up to 35 percent of the loans refinanced through the Dodd-Shelby program would eventually default. The lenders wouldn’t have any exposure to those losses — they would be paid back through the fund created by the Dodd-Shelby bill.

And this is where we come full circle, back to Sen. Dodd and his sweetheart deal from Countrywide. The Dodd-Shelby housing-bailout bill would be bad public policy under any conditions. Lenders are already under severe pressure to write down loans for borrowers who still have a chance to make it. The bill is overwhelming slanted toward protecting lenders, like Countrywide, that lowered their standards dramatically on a bet that home prices would never go down and subsequently find themselves holding a lot of bad debt.

Congress should launch a full investigation of Countrywide’s program to influence the powerful; that much should go without saying. But if the Senate passes the Dodd-Shelby housing bailout before such an investigation can run its course — especially if that investigation finds that members of Congress were improperly influenced — it will have allowed Countrywide to take the money and run.

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Originally posted by SoCalRay

This story about Dodd is so overblown by Faux News

Have you guys seen what Dodd got for Rates?

IT was not that special. It looks special comparing to todays rates, but he got 4.25 and 4.5 in 2003.

Anyone could of gotten those rates.

I got 4.375% on a 30 year at the time, So I guess I got special treatment also.

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Originally posted by djorge44


This bill is going to screw FHA and will end up screwing brokers, but helping banks

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Originally posted by vburek

to the Kool Aid drinking SoCalRay who gets his info from liberal areas. You say it was not "that special", so at least you agree he got a special deal, which violates the Senate rules. But of course liberals dont need to follow these rules, just need to blame repub.

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Originally posted by vburek

i was in the biz then, but you just made everyones point but your liberalism is blocking you from understanding. You just said it again, "It was not as special..." so you said he did get a special deal, that is wrong and against the rules of the Senate. but again liberals dont worry about the rules unless it is a republican breaking them. I guarantee that if a republican got his deal all the Kool aid drinking places like MSNBC, CNN would be all over the story. and you would have a much different opinion. This is just like the argument about Bill Clinton, he lied to a federal grand jury, Martha Stewart and others went to jail for lying, but what do the liberals say, it wasnt that big of a lie.

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