Streams

HUD Secretary on the $25 Billion Homeowner Settlement

Friday, February 10, 2012

HUD Secretary Shaun Donovan discusses the big deal struck between federal and state officials to help struggling homeowners--and what it could mean for the New York area. More information on the settlement here.

Guests:

Shaun Donovan

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Comments [36]

Jack Jackson from Central New Jersey

@Sane Man from moon -

"If rents go down we are better off because costs have dropped."

Not quite. Rents are HIGHER now because there is more demand for rental housing as banks are much tighter on lending and few have 20% for down payments. Houses in my market went from $200K - $500K and then down to $250K in the span of ten years.

Feb. 12 2012 03:05 PM
jo anne from Westchester

What does $2000 do when there is no home, no money for a future down payment, a family split up who once used to live together? How does this make people like myself who believed their home was going to be their retirement, who put their blood and sweat into keeping the home beautiful, where's the compensation for having lost the American dream because Citi wouldn't even come to the table to try and work things out for a loyal client that was experiencing employment hardship? And now I'm suppose to feel good because Citi is going dish out $2000 - maybe?

Feb. 10 2012 06:00 PM
bob from Bensonhurst

Looks to me like many white color criminals got away with nothing short of murder on huge scale, after all this is capital in action; the greed has had good name, the new oligarhs or plutocrats (acc. K. West) made sure Glass-Stigal (spel.?) act doesn't exist with the help of Clinton, genious of Greenspan after years became just hot air (acc. to his memoirs), the democracy is nowhere to see, the banks actualy have communism with 1:1 $ exchange, even better with help of Fed. Reserve they have free lunch, dinner and all the living, and we have problem with Putin, China or Syria? This is nightmare of trilions of $$$ proportions on multi level...:(envi Germans...

Feb. 10 2012 05:22 PM
Eugenia Renskoff from Brooklyn, NY

Hi, How can a mere $2,000 to homeowners who lost homes between 2008 and 2011 be compensation enough? Was each house or condo worth $2,000? Why doesn’t the government pay the borrowers first and then the banks? The banks did not have their homes foreclosed on. I hope the borrowers have the right to sue. And I also hope that the government gets to us who lost our homes between 2005 and 2008. In my case nothing but full restitution would satisfy me. Eugenia Renskoff

Feb. 10 2012 12:26 PM
david ores from Manhattan

Who would trade their home for 2000 dollars?

Why do banks and wall street get to literally steal over one trillion dollars and have to give back only 25 billion?

No moral hazard? This is actual immoral encouragement. A large reward for criminal / unethical behavior. Including the collusion to force through de regulation. Including the SEC asleep at the wheel.

All of this mess was and is criminal. Not an act of "natural economic forces". ....Like a hurricane or tsunami

Greed ridden, soul less people did this! By intention.

Why do these govt. officials act like it was an act of God?

It is an act of crime. It's not a recession. It is not a financial crisis. People did this.
40 million lost homes (life savings) was a giant financial abuse.

ALSO, Banks are getting HUGE immunity in this deal against any CIVIL law suit.

The whole thing is is disgusting. Especially the lame profoundly ineffectual govt response. Worse than Katrina.

David

Feb. 10 2012 11:11 AM
Eastsidess from New York city

Why did foreclosures happen many more in the last 4 years? 1.People's eagerness to grab the American dream2.Brokers, bankers and banks that wanted to make money fast and agreed to give loans to all who applied. (Has anybody tried to sue this group, esp brokers and bankers that made a killing on bonus' and commissions?)
Why does the people who have done things right, as in keep paying our mortgages by curbing expenses, using savings be given a $1000/ or given a break of 2 months mortgage free time, to breath easy???
Yes, if owners were told lies, make a list and have a House Czar correct it. Similarly if foreclosed households spent their money in ridiculous expenses then cried 'poverty' correct it. Or else, what lessons are adults learning?

Feb. 10 2012 11:10 AM
Sane Man from moon

A house is NOT a savings vehicle. A house supplies housing to residents. It pays the rent for those who own the house. It is the sum of all future rent costs that the owner would in the alternative rental position need to pay less the upkeep costs of property taxes, repairs etc. All these future streams of cash equivalents must be discounted to present value.

All people are better off, or RICHER, if is COSTS LESS to maintain ourselves. If it costs less to drive (by lower car prices or car rental rates). Likewise is monthly rents dropped, we are all better off (except if we own more housing than we can use, i.e. owner of 2 or more units).

If rents go down we are better off because costs have dropped.

Rents dropping is MATHEMATICALLY EQUAL to home prices dropping.

Low home prices are good for America. It promotes greater flexibility.

High home prices mean that humans (regular people) have a more difficult time finding homes, changing homes, moving and spending the REST OF OUR MONEY on non-housing costs.

Feb. 10 2012 11:10 AM

"Hello, we're going to take billions of dollars of government bailouts, we're gonna turn the market into a casino fixed to our benefit, we're gonna throw you out of your home, and then!!! We're gonna pay ourselves ENORMOUS salaries!!!"

Ah, HA, HA... HA!!

Isn't it a GREAT Kountry®??

Feb. 10 2012 10:28 AM
Mark F from Staten Island

If someone asks why it took 3 years to do something, and the Secretary tells you they've been negotiating for a year, the obvious follow-up is "What about the other 2 years?" Why don't you push a little, Mr. Lehrer?

Feb. 10 2012 10:27 AM
Sam

My bank HSBC does not take part in HAMP or HARP and I don't qualify in refinance as they tell me that my income is low and that my home value is gone down. I tried calling making home affordable.gov with not much help. Where else can I get help now?

Feb. 10 2012 10:26 AM
Renter from East Viilage

The banks will determine who gets a write down? I love a good laugh in the morning. Will this "Bloomberger" do a better job on a national level then he did with housing in NYC? What about renters made homeless by the housing policies in NY that allow landlords, through fraud and with the co-operation of city agencies like the one Donavan headed,to displace families.NYC allowes an afordable housing shortage to continue.

Feb. 10 2012 10:25 AM
Oral from Ny

My mortgage was sold by boa to another bank that is not a part of the settlement, can I still be help?

Feb. 10 2012 10:24 AM
Lisa from NJ

What is the statute of limitations on suing these companies?

Feb. 10 2012 10:23 AM
angryman from Alien Space

PRINCIpal reductions are GROSS income taxable in the year of debt forgiveness. Absent legislation from Congress, debtor has ordinary income to the extent of amount of princiPAL reduced. Sorry Charlie

Feb. 10 2012 10:23 AM
Amy from Manhattan

I think the most important part of this settlement is that accepting it doesn't keep people from pursuing their own lawsuits. I hope there can be a class action suit.

Feb. 10 2012 10:22 AM
Bill

Does restoring the housing market mean propping up the inflated housing costs that contributed to the problem in the first place? If so, shouldn't the market be allowed not so much to bottom out but to settle down to something rational relative to our incomes?

Feb. 10 2012 10:22 AM
Karen Young from Brooklyn

I notice the term used is "settlement." Does this deal mean that the banks and their staff, who engaged in illegal practices, lied and stole and destroyed our economy, are now immune from further prosecution? People are stunned that no one has yet gone to jail. Also that there is no new regulation to prevent these things to happen again. What is the status of arrests and jail terms for these criminals?

Feb. 10 2012 10:22 AM
Katie from Brooklyn

Sounds like there's a lot of potential for needy people to get scammed. I can picture the internet ads now, claiming people can get their piece of the settlement by clicking here, giving their social security #, paying an exorbitant fee, etc. What is the government doing to prevent hurting people from getting caught in a scam related to this program?

Feb. 10 2012 10:22 AM

For some people, $2000 amounts to more than one month's rent. For me in Astoria, it is 3 1/2 month's rent.

Feb. 10 2012 10:21 AM
Jeff Pappas from Ct

My mort is 850 month and I owe 85 K on my home that is worth at least 200 K
I am self employed and have paid all my bills ONTIME
However there is NO program for me and banks will not loan me or let me refi
So I have used my Credit cards about 25 K at crazy rates, I have NOT been late on any payments I have borrowed $ from friends and family but am sick of it...
Together I pay about 1700 per month, yet if I could get a refi 30 year at lower rate my payments for mort n credit could drop to $ 600 month and make the BANKS more $ in interest . How is this math not seen as common sense !
Seems like a no brainer to me

HELP

Feb. 10 2012 10:21 AM
MichaelB from Morningside Heights

Took a long time? Fair enough. But why didn't the administration put a freeze on the foreclosures and other continued egregious practices by the banks -- so many of which were a consequence of the earlier abusive practices...?

Feb. 10 2012 10:19 AM
Brian R. from Red Bank, NJ

Please explain to me how it is that this settlement was negotiated to help borrowers who, by the nature of their loans, are among the least credit worthy of those who got loans? I bought my house with 20% down, with a Fannie Mae loan and the value of my house is far smaller than the value of the mortgage. We all know this is because risky bankers, risky brokers and risky borrowers collapsed the market. When will the administration work on something that impacts the massive loses I've taken due to their actions?

Feb. 10 2012 10:19 AM
Barbara Lewin

So what are the steps to help those of us who have been current on our mortgages, even though we lost jobs? Are we going to be penalized for doing the right thing?

Feb. 10 2012 10:19 AM
Steve from NJ

What about people who are in danger of forclosure but are still paying their mortgage on time? What help is available so they do not face forclosure?

Feb. 10 2012 10:19 AM
JNK from Westchester

What if you have continued to make payments, but only through the extreme generosity of a family member (who can't really afford to keep helping)?

Feb. 10 2012 10:19 AM

Woo Hoo!!!

I got screwed by a corrupt banking system, my family was thrown out of their home and I got a $2000 check!!

Woo Hoo!

Feb. 10 2012 10:18 AM
Edward from NJ

Is a "loan modification" like a refinance in that banks extract thousands of dollars in fees when they do one?

Feb. 10 2012 10:16 AM
Jon from LI

Are you still eligible if you had a loan with one of the five banks but recently refinanced with another bank to get a better rate?

Feb. 10 2012 10:16 AM
Jim

Who is paying for this?

Feb. 10 2012 10:15 AM
Jennifer from New York City

Any settlement that depends on the banks to do the initial outreach is really pointless when these are the very entities that have been preying on homeowners, including those that have been paying their mortgages. But go ahead and congratulate yourselves on reaching your 3 am settlement.

Feb. 10 2012 10:15 AM
Chriss from Montclair, NJ

This unfair to those of us who played by the rules.

Understand, if someone chooses to buy a house for 500k, and now it's worth 200k, it's THEIR PROBLEM.

Or, can we expect every bad decision someone makes, if enough other folks make it too, the Government will step in and "make it right"?

Or at least I thought that was true.

Feb. 10 2012 10:12 AM
Frank from NYC

Here we go, rewarding people who bought homes they couldn't afford. My bank isn't cutting my mortgage or interest rate as a reward for staying current. The argument is that I will benefit by a healthier real estate market, if perhaps I want to sell my home. But those who get this 'gift' will get that as well. Please Mr. Secretary how is any of this fair to the rest of us?

Feb. 10 2012 10:12 AM
Superf88@gmail.com

"this settlement is a start"-- Obama

Huh? Settlements aren't starts, they are settlements...

Buckle in for more bank fees to makeup for their new costs....

Feb. 10 2012 10:11 AM
The Truth from Becky

My understanding is that there are only 5 banks were participating. Who are they?

Feb. 10 2012 10:09 AM

JOKE!

Feb. 10 2012 08:48 AM
MichaelB from Morningside Heights

From various books I've read, the amount involved is a pittance compared to the amounts that homeowners and the population at large have suffered.

Doesn't seem enough also to remove the temptations for the next time -- the banks made sooo much money on fees with no regard to legitimacy or sound financial practices.

Aren't the banks STILL engaging in practices wherein they make huge sums by levying higher and higher fees from consumers of all stripes, instead of the boring & conservative old way they made money in the past: lending money to qualified consumers and small businesses and getting a conservative, but dependable return from the interest?

We should stop calling them bankers and start calling them gougers. The swine.

Feb. 10 2012 08:47 AM

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