 Got a beef about housing prices, loan mods, jobs or otherwise? The White House is standing by to field your comments .
The White House is inviting you to post your questions on the economy and vote on submissions from others. The President will answer some of the most popular in an online town hall on Thursday.
Those of you who would like to let us know what you sent can post it here too. Thanks to commenter NoHoDolphin, who alerted L.A. Land on another thread.
-- Lauren Beale
Thoughts? Comments?
Photo: President Barack Obama speaks during a town hall meeting March 18 at the Orange County Fairgrounds in Costa Mesa. Credit: Luis Sinco / Los Angeles Times
 Reduced mortgage payments for the unemployed? From the Associated Press at latimes.com:
Citigroup Inc. said Tuesday that it will lower mortgage payments for some homeowners to an average of $500 a month for three months as part of a new program to help the unemployed.
The struggling bank makes the move as President Barack Obama looks to lenders to adjust the way loans are handled.
Citigroup's new mortgage efforts also come on the heels of the latest attempt to bail out the company, which includes the U.S. government's exchange of up to $25 billion in emergency bailout money given to Citigroup for as much as a 36 percent equity stake in the company. The deal between the Treasury Department and Citigroup represents the third rescue attempt for the bank in the past five months.
Unemployed homeowners who may qualify for assistance from Citigroup under the Homeowner Unemployment Assist program include those that are 60 days or more past due on their mortgages or in foreclosure and can pay the reduced amount. Customers must also have a first mortgage loan that is owned and serviced by CitiMortgage Inc. and conforms to government sponsored enterprise limits. The house must also be the customer's primary residence, with homeowners meeting all insurer and guaranty requirements.
It will be interesting to see if other bailed-out lenders follow suit. If anyone gives this a try let me know how it works out.
-- Lauren Beale
Thoughts? Comments?
Photo: Citigroup headquarters in New York. Credit: Richard Drew / Associated Press
Bailout backlash is the subject of a Sunday Money & Co. blog item on a Tennessee Republican Party promotion. The TNGOP.org website asks those opposed to the "endless 'bailouts' and 'economic stimulus' packages" to show their displeasure by purchasing a bumper sticker that expresses their frustrations.
Problem is, the sticker says "HONK if you're paying my mortgage." Shouldn't that be "HONK if I'm paying your mortgage?"
-- Lauren Beale
Thoughts? Comments?
 The White House released an executive summary of its Homeowner Affordability and Stability Plan on Wednesday. There's lots of detail in the document, but here are three major areas of focus. First:
Enabling Up to 4 Million to 5 Million Responsible Homeowners to Refinance: Mortgage rates are currently at historically low levels, providing homeowners with the opportunity to reduce their monthly payments by refinancing. But under current rules, most families who owe more than 80% of the value of their homes have a difficult time refinancing. Yet millions of responsible homeowners who put money down and made their mortgage payments on time have -- through no fault of their own -- seen the value of their homes drop low enough to make them unable to access these lower rates. As a result, the Obama administration is announcing a new program that will help as many as 4 million to 5 million responsible homeowners who took out conforming loans owned or guaranteed by Fannie Mae or Freddie Mac to refinance through those two institutions.
From the second area, Create a $75-Billion Homeowner Stability Initiative to Reach Up to 3 Million to 4 Million At-Risk Homeowners, here are the bullet points: -- Helping Hard-Pressed Homeowners Stay in their Homes
-- No Aid for Speculators
-- Protecting Neighborhoods
-- Providing Support for Responsible Homeowners
-- Providing Loan Modifications to Bring Monthly Payments to Sustainable Levels
The third, Supporting Low Mortgage Rates by Strengthening Confidence in Fannie Mae and Freddie Mac, includes $200 billion in funding commitments.
How this plays out is not spelled out. If the earlier "Hope for Homeowners" plan, which only helped several hundred homeowners, was any indication, this could be very long process.
-- Lauren Beale
Thoughts? Comments?
Photo: President Barack Obama delivers remarks about the home mortgage crisis Wednesday at Dobson High School in Mesa, Ariz. Credit: Gerald Herbert / Associated Press
Remember the guy in Florida who breaks into vacant foreclosures and matches them up with a homeless "house sitter"? Well, Ohio Rep. Marcy Kaptur is eliminating the middleman and urging troubled homeowners to just stay put. From the Toledo Blade on Saturday: U.S. Rep. Marcy Kaptur (D., Toledo) is advocating homeowners threatened with foreclosure exercise squatter's rights in trying to stave off the loss of their house.
 "I'm saying to them possession is 99 percent of the law; you stay in your house," Miss Kaptur said yesterday, continuing a crusade she started several weeks ago in Congress and CNN picked up Thursday night.
She said she believes that many so-called predatory and subprime loans -- those made to borrowers who did not qualify for a conventional mortgage -- may have been illegal.
She urged homeowners not to panic and leave their home just because they receive a foreclosure notice from their lender, and she said they should demand that the mortgage-holder produce a mortgage audit.
"I say to the American people, you be squatters in your own homes. Don't you leave," she said during a speech in Congress earlier this month.
Her advice is causing a flap in some corners. The Blade quotes Realtor Jim Moody, a Toledo mayoral candidate, as saying "This is goofy."
Her motivation? Miss Kaptur said she started advocating that homeowners fight foreclosure by staying [in] their home after it became clear that the $700 billion bailout of the financial industry passed last year was not working as intended by Congress.
Well, she got that part right.
OK, we've seen a Florida "solution," now an Ohio version. It's probably just a matter of time before a Californian tops these. Hat tip to Luke Mullins' Home Front blog at U.S. News & World Report.
-- Lauren Beale
Thoughts? Comments?
Photo: Rep. Marcy Kaptur spoke during a rally at a Jeep plant in Toledo, Ohio, in December. Credit: Madalyn Ruggiero / Associated Press
Three Columbia University professors today tackled one of the thorniest problems of the housing debacle: how to increase modifications to soured home loans that have been bundled into mortgage bonds.
Troubled mortgages that back securities in the private market, with customer-service outfits collecting payments, are far likelier to go into foreclosure than those in which the lender keeps the loan, the professors note.
They propose creating financial incentives for loan servicers to modify loans to make them affordable, along with some changes in laws to remove impediments.
The authors are a Columbia law professor, Edward Morrison, and two business professors, Christopher Mayer and Tomasz Piskorski. In a news release, the academics said privately securitized mortgages “are at the core of the housing crisis, accounting for more than 50% of foreclosure starts."
They said federal authorities could promote cooperation between servicers and homeowners, averting unnecessary foreclosures, by: "1) Compensating servicers who modify mortgages. Using TARP [Treasury Department bailout] funds, the federal government should increase the fee that servicers receive from continuing a mortgage and avoiding foreclosure, thereby aligning servicers’ incentives with the interests of borrowers and investors; and
"2) Removing legal constraints that inhibit modification. The federal government should enact legislation that eliminates explicit restraints on modification and creates a safe harbor from litigation for reasonable, good faith modifications that raise returns to investors."
The authors contend the plan would prevent nearly 1 million foreclosures over three years. They say it would cost no more than $10.7 billion – more effective and less costly, they argue, than such alternatives as letting bankruptcy judges modify first mortgages.
Mayer and Columbia Business School Dean Glenn Hubbard had attracted attention previously by suggesting that the U.S. Treasury or the Federal Reserve reduce loan rates by buying mortgages or mortgage securities from the all-but-nationalized home-loan giants Fannie Mae and Freddie Mac.
The full proposal, along with video of Mayer discussing housing, mortgage and modifications, can be reviewed at a Columbia Business School real estate site.
After the Federal Reserve announced in November that it would spend $500 billion doing exactly that, rates on 30-year fixed mortgages eligible for Fannie and Freddie dropped precipitously, settling in the low 5% range on average and at times dropping well below 5% for particularly solid borrowers.
-- E. Scott Reckard
A three-member Congressional Oversight Panel has scheduled hearings to look at what L.A. Land commenters have been asking for months: Where's the bailout for the little guy? First stop, Las Vegas. From today's L.A. Times: In this hard-hit corner of the nation's mortgage meltdown and credit crisis, it's hard to find anybody who sees evidence that the Treasury Department's $700-billion rescue plan is working after two months.
... Economists, local bankers, beleaguered homeowners and government officials said here Tuesday that the billions of dollars paid out by Washington to the banking industry were not filtering down and that Nevada's desperate condition was growing worse.
On the panel are Chairwoman Elizabeth Warren, a Harvard University law professor; Government Accountability Office and Treasury Department Inspector General Eric Thorson and Democrat Harry Reid of Nevada, the Senate majority leader. Despite receiving more of the first $350 billion, major banks have not increased lending, Reid said. In a later interview, Warren said the Treasury Department should have a lot of leverage to compel banks to do more, given that taxpayers have handed over billions of dollars and in many cases are now shareholders.
 And who can compel the Treasury Department? From Tuesday's Wall St. Journal:
House Speaker Nancy Pelosi suggested Monday that Congress will force the Treasury Department to do more to help struggling homeowners if the administration seeks access to the second half of its $700-billion financial-rescue fund.
Ms. Pelosi's comments reflect frustrations of lawmakers from both parties who feel Treasury Secretary Henry Paulson has not spent the funds the way Congress intended. Specifically, they say the Troubled Asset Relief Program, or TARP, hasn't been used to directly aid homeowners having trouble paying their mortgages.
Instead, the article concludes, TARP "has become increasingly entangled" in the auto industry bailout.
-- Lauren Beale
Comments? Thoughts?
Photo: House Speaker Nancy Pelosi of Califorinia speaks during a news conference Monday on Capitol Hill. Credit: Associated Press
On the one hand, today's Business section has the story "A plan to slow home losses," Gov. Arnold Schwarzenegger's proposed 90-day freeze on pending home foreclosures. The governor unveiled a foreclosure relief and long-term mortgage reform initiative as part of an economic stimulus package that he plans to put before lawmakers in a special session of the Legislature scheduled to begin today.
 "The single most powerful action our state can take to shore up its economy is to help Californians stay in their homes," Schwarzenegger said. "Curtailing foreclosures will stop the downward spiral of home prices, free up needed cash for homeowners, help save jobs and make an immediate positive impact on our economy."
The governor's effort is meant to slow the pace of foreclosures that hit a record high of nearly 80,000 during the third quarter, according to research firm MDA DataQuick.
Then on the other hand, we have "Schwarzenegger calls for sales tax hike, cuts in services" at latimes.com. Gov. Arnold Schwarzenegger unveiled a plan today for a steep sales tax increase, new levies on alcoholic drinks and the oil industry, and deep cuts in services to wipe out a budget shortfall that is expected to swell to more than $24 billion by the middle of 2010.
The linchpin of the plan is the sales tax increase of 1 1/2 cents on the dollar. ...
Schwarzenegger also proposed extending the sales tax to appliance and furniture repair, vehicle repair, golf fees, veterinarian services, amusement parks and sporting events. He proposed a 9.9% tax on the extraction of oil from California ground, the expansion of sales tax to some services, and a 5-cent-per-drink tax on alcohol. His plan also includes a $12 increase in annual vehicle registration fees.
The governor also wants a number of significant spending reductions, including cuts of $2.5 billion from schools and community colleges. He called for requiring state workers to take a mandatory day off without pay each month and would eliminate two of their state holidays.
One hand giveth, the other taketh away.
--Lauren Beale
Thoughts? Comments?
Credit: Rich Pedroncelli / Associated Press
The mortgage modification movement is poised for a big jump off the starting blocks with the Friday announcement by JP Morgan Chase & Co. of plans to modify terms on $70 billion in home loans for as many as 400,000 borrowers, according to today's Associated Press article in the Los Angeles Times and a longer article in the Wall St. Journal.
 Borrowers behind on their payments or about it be -- particularly those with option adjustable interest rate mortgages, a.k.a. options ARMs, that result in negative amortization -- could be moved into loans with lower rates or smaller principal amounts owed.
JP Morgan joins other lenders taking a similar course, including Bank of America and Wachovia.
Reports the Journal: "The move ... suggests that banks are realizing they can improve the value of their loan portfolios through mass modifications rather than foreclosures, which tend to produce larger losses. Until now, mortgage holders have been reluctant to renegotiate loans or have been doing so one-by-one, a time-consuming process. The bundling of loans into securities that are then sold to investors further complicates matters."
Foreclosures will be put on hold for 90 days while the modification process is put into effect. That's a long road ahead.
--Lauren Beale
Thoughts? Comments?
Photo: JP Morgan Chase headquarters in New York. Credit: Mark Lennihan / Associated Press
 The L.A. Times goes out front today with the story of the difficulty IndyMac is having in its efforts to reach troubled borrowers to talk about loan modifications. (Hey, if I had lied about my income to get a mortgage, and a government-run bank wanted to talk to me about said mortgage, I probably wouldn't answer the phone either.)
Seriously: ...when the FDIC, which is running IndyMac, mailed out 35,000 letters offering homeowners a chance to rework the terms of their mortgages, more than half the borrowers were apparently so discouraged, scared or stressed out that they didn't bother to respond.
Relatedly, from Reuters: JPMorgan Chase & Co is making changes to about $110 billion in mortgages to help its borrowers and is temporarily halting foreclosures while it alters the loans.
The bank said on Friday it is expanding efforts to renegotiate loans for more borrowers, including customers it inherited when it bought struggling Seattle-based bank Washington Mutual last month.
Two cents, way off topic: The news that IndyMac's ambitious loan modification program is off to a slow start was reported last week by Tanta at Calculated Risk, in one of her typically insightful, well-written posts. I mention that not as a hat tip to Tanta (or to myself for linking to Tanta's post), but to make a larger point: There is much discussion these days about shrinking newspapers and the decline of journalism. No doubt, newspapers are in trouble. But journalism is not. It is being practiced today by more smart, passionate people than ever before -- people like Tanta. True, she is not a traditional journalist -- she doesn't work for a newspaper or a wire service, and her identity is a mystery. But she knows her stuff (her online bio says she's a former bank officer and mortgage lending specialist) and she's an enterprising, engaging and informative writer. She's a journalist, in the best sense of the word. And she's part of a growing army of smart, passionate, serious-minded bloggers, an army that didn't exist when I started in this business 21 years ago. It's a good thing.
-- Peter Viles
Your thoughts? Comments? And yes, I have a crush on Tanta. So sue me. I think Laker does too.
Photo Credit: A.P.
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Got a beef about housing prices, loan mods, jobs or otherwise? The White House is standing by to field your comments . 
