12 month mortgage holiday

It only puts the payments on hold for 1 year...but then they'll resume. So, the idiots that can't pay their mortgages will spend all of the money they should be saving to pay their mortgages and when the mortage resumes...then they'll be broke again.

The Durbin Amendment will come up to vote this week in the Senate and my sources tell me we now have 60 votes to cut-off debate and bring the amendment and the bill up for a full vote. I expect to get about 52 votes for the Final Amended Bill

The Problem
Credit Suisse estimates that as many as 1 in 6 mortgages in America will be lost to foreclosure in the next four years. Each foreclosure is a tragedy for the family thrown out on the street. But these failing mortgages have also destroyed the global financial markets by severely damaging the value of the securities that are based on them. Even though trillions of American taxpayer dollars have been allocated towards reducing the threat that these “toxic” assets will bring down the global financial system, the risk of further economic destruction will remain until the underlying mortgages that are the root of the problem are stabilized. Helping families save their homes is one of the most urgent moral and economic imperatives that America faces.

The Solution
The Senate will soon be given the opportunity to help solve this crisis by preventing 1.7 million mortgages from falling into foreclosure and preserving over $300 billion in home equity for neighboring homeowners who have made each of their own mortgage payments on time (according to estimates from Moody’s Economy.com and the Center for Responsible Lending). The Durbin amendment to the Helping Families Save Their Homes Act would finally create the necessary incentives such that failing mortgages would be voluntarily restructured on the scale that is required to turn the economy around, and is the most important step that Congress can take in helping to implement the Obama Administration’s Homeowner Assistance and Stability Plan. The objective of the amendment is to encourage the servicers of troubled homeowners to offer aggressive loan modifications that would keep families in their homes, which compared to the only other alternative – foreclosure – is more profitable for the banks, more secure for the families, and more stable for the surrounding neighborhoods. It would do so by allowing borrowers at risk of foreclosure to receive assistance from the bankruptcy courts in restructuring that loan, but only if the servicer of that loan has not offered to modify that loan outside of court. The amendment would not cost the American taxpayers one penny.

How It Would Work
Specifically, if a servicer provides either a modification offer that complies with the Obama Administration’s Homeowner Affordability and Stability Plan that reduces the family’s monthly payment to 31% or less of their income, or a refinancing offer that complies with the Hope for Homeowners program as modified by this housing bill, that offer would preclude a borrower from receiving a primary mortgage modification in bankruptcy (low income borrowers must be offered a more aggressive modification for the servicer to maintain the veto). In addition, only primary mortgages originated before 1/1/09, with outstanding principal less than $729,750, that are at least 60 days delinquent, and for which a foreclosure notice has been sent could be modified in bankruptcy.

For those borrowers that do not receive a modification offer from their servicer, that meet all of the other criteria above, and require assistance in bankruptcy, the courts could only reduce the loan principal to fair market value (which is more than the lender would collect if the home is sold in foreclosure), reduce the interest rate to the conventional rate plus a reasonable premium for risk (which at the moment would equal around 6.5% to 7%), and lengthen the term to the longer of 40 years reduced by the period for which the mortgage has been outstanding or the remaining term of the mortgage. If the loan principal is reduced in bankruptcy, the borrower must evenly split any price appreciation with the lender up to the original principal amount if the home is sold while the borrower is still in bankruptcy. These bankruptcy provisions would sunset when the Housing Affordability and Stability Plan ends in 2012.

Support
The amendment is supported by Citigroup, AARP, Consumer Federation of America, Leadership Conference on Civil Rights, AFL-CIO, SEIU, Center for Responsible Lending, National Association of Consumer Bankruptcy Attorneys, and dozens of other groups.

How about renters? How about a renters holiday, too?

And while we're at it, how about food? Why don't we just make a 12 month holiday on paying for food, too. Everyone can just eat what they want, and no one has to pay for it. Let's get the government to pay for it all!

(In case you can't tell, this is extreme sarcasm)

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"The consolidation of the states into one vast republic, sure to be aggressive abroad and despotic at home, will be the certain precursor of the ruin which has overwhelmed all those that have preceded it."

- Robert E. Lee, 1866

"economic" bubble and will certainly NOT solve the real estate issue. I would rather see a real estate "debt relief" holiday such as ALL current mortgages are reset reflecting a 25% decrease in principle and an interest rate of 4%. Not only would this help put money back into the economy but it will help relieve the stress on the real estate market.

This could potentially put all the banks that didn't get the bulk of the taxpayer bailout money out of business. I could actually see this happening; make the sheeple happy while crushing the banking cartel’s competition in one fair swoop.

Isn't government’s job to enforce contracts? I agree with scdecade, we should be calling for a tax holiday not relief on a contract that we signed.

http://www.reuters.com/article/ousivMolt/idUSTRE53K4RA20090428

Thanks for sharing this. Mortgage loan modification is the best option these days. Depending on your situation, your current mortgage interest rate and actual savings, refinancing will always be the best way to solve financial troubles. Refinancing these days will typically be the best option as it can save you hundreds of dollars per month if you are refinancing from a high interest rate to a lower rate. Let me give you a certain situation. Bo Jackson was a standout talent as running back for the Oakland Raiders and as a left fielder and designated hitter for the Kansas City Royals, excelling at both before a hip injury sidelined him for good. Many would give short term loans to see him play again. However, he is trying his hand at something else. Bo is a part owner of the Burr Ridge Bank and Trust, a community bank in Burr Ridge, Illinois. He picked a community bank as a type of bank known for financial stability, and its unlikely Bo Jackson will ever need mortgage loan modification.

That's me getting 54% of my net income back in one year, and I'd be mostly out of debt!

I think it is imperative to read the entire plan behind the Mortgage Holiday idea, because when you read the entire plan you will see that it is well thought out and would immediately stimulate the economy.
Go to WWW.SAVEOURECONOMY.COM to read the plan.

To address the concerns expressed about how the banks will get paid, the banks will get paid an average 6% interest rate for one year. This ultimately will help heal the banks and encourage refinancing of real estate. It is the ultimate "Trickle Up" plan. Again, I urge you to read the plan on the website.

That what gives your mortgage any value whatsoever is your signature on the document?

THE BANK DOES NOT HAVE THE MONEY TO LEND YOU. YOUR SIGNATURE IS USED AS A SECURITY WHICH HAS VALUE TO THE BANK, THAT ALLOWS THEM TO 'LEND' YOU MONEY WHICH IS ESSENTIALLY CREATED BY YOUR SIGNATURE.

so the banks don't take in any money for a year, they can't pay their bills, so we inflate the hell out of the money to bail them out yet again so they stay in business, banks don't collect any interest on these mortgages, which means depositors don't see any interest on their money, so they pull it out of the bank, meanwhile we see huge distortions in the retail market because everybody decides to buy a plasma HD television (which are total crap, btw), which in turn creates a consumer electronics bubble, which all the former bank depositors have their money invested in, which bursts when all these failed banks are finally able to start collecting money again, which means investors lose their shirts, wind up broke, and start missing mortgage payments, and banks are stuck with trillions in subprime mortgages, which means they need yet another bailout, so we have to have yet another mortgage holiday!

so the banks don't take in any money for another year...

with Citibank or Bank of America? Feels nice mailing that payment every month, doesn't it? They want their balances paid back and they want money from the "taxpayer". Must be nice to be them.

it sounds "nationalization of credit" to me. Why not nationalizate food, computers...?