Hope for homeowners needs to be modified

By Kayleigh Harvey - Talk Radio News Service

The House Financial Services Committee met today for the first time under the one hundred and eleventh Congress to discuss "Promoting Bank Liquidity and Lending Through Deposit Insurance, Hope for Homeowners, and other Enhancements". 

Testifying before the committee members were John Bovenzi from the Federal Deposit Insurance Corporation and Meg Burns from the Federal Housing Administration. 

Committee Chairman Barney Frank (D-MA), opened the meeting saying, "Hope for homeowners came out of this committee and we passed it last year, we didn't do it well. I acknowledge that, and it has to be corrected."

The discussion focused on proposals to modify the current 'Hope for Homeowners' Program.

John Bovenzi in his testimony to the committee said that, "Liquidity is a key component in returning the economy to a condition where it can support normal economic activity and future economic growth"

"Deposits, especially FDIC ensured deposits are a key source of bank liquidity. The FDIC has implemented the temporary liquidity guarantee program to help stabilize the funding structure of financial institutions and expand their funding base to support the extension of new credit", he stated. The FDIC is trying to increase their line of credit to potential home buyers from $30 billion to $100 billion. 

Congresswoman Judy Biggert (R-IL) said: "From home builders we're hearing that they have homes and condos to sell, people arrive, but because of the severe restrictions that have been put on the loan, make it so that the buyers walk-away".

Meg Burns said: "All of us at HUD welcome and applaud your decision to make modifications to the 'Hope for Homeowners' program. As you are well aware the initial program data clearly indicate that changes are not only appropriate but necessary. Furthermore, changes are needed as quickly as possible. To date FHA has ensured no loans under the program, lenders have taken 451 applications and 25 loans have closed".

February 3, 2009

Candidate Moran explains his Virginia "success plan"

"I believe in the power of Virginian's to solve this energy crisis," said Brian Moran, a Democratic candidate for governor of Virginia during a conference call briefing which discussed his plan to protect the environment and build the energy economy.

Moran wants to put Virginia on a clear course to protect the environment, create green jobs and invest in renewable energy. "It certainly will be the most progressive, innovative, job creating environmental plan you will see in this campaign," claims Moran.

In order to create a plan for Virginia's future, Moran wants to "couple the need for a strong economy, creation of jobs, while protecting our environment."

by Suzia van Swol, University of New Mexico-Talk Radio News Service

Should the U.S. go nuclear?

Arjun Makhijani, President of the Institute for Energy and Environmental Research, said that using more nuclear power plants to advance U.S. energy would be “inherently proliferation prone.” Patrick Moore, Co-Chairman of the Clean and Safe Energy Coalition and Co-Founder of Greenpeace, countered saying nuclear power was “one of the safest technologies ever invented” and “You’d have to take over the United States of America to steal this stuff.”

At a debate today, Moore claimed that nuclear energy is clean and does not emit greenhouse gases. He also stated that “nuclear waste” is 95 percent reusable which can lead to recycling potential energy. He remarked that nuclear energy is the only type of alternative power that can “effectively replace fossil fuels.” Makhijani believed that using other forms of energy like wind and solar would allow the U.S. to be free of energy carbon emissions in 40 years.

Moore said that wind and solar energy are “inherently intermittent” and these types of energy can disappear “three or four days at a time” while nuclear energy is “reliable.” Makhijani stated he would rectify this problem by allowing for “some storage” of these types of energy so people could use it whenever they wanted. Makhijani also questioned Moore’s statements about power and cleanliness of nuclear power saying that if they were true, Wall Street “would be lining up” to build nuclear power plants. Makhijani joked that Wall Street thought it was okay to give out subprime mortgages, but they felt nuclear power was “too risky.”

Makhijani felt that using wind energy would be cheaper than nuclear energy, and one must take that into account in this economic crisis. He also said that the U.S. has the capacity to do it within its borders. Moore submitted that it would cost more presently but nuclear power eventually “pays for itself” and Moore added that solar energy presently would cost five times what nuclear energy costs.

Housing market took risks

Bush Economic Adviser Keith Hennessey said an "oversupply of houses" has contributed to the significant downturn in housing markets. He said that as long as there is an oversupply, a downturn will continue.

At a summit on housing, Hennessey said that mortgages have been "sliced and diced." Hennessey said these bad mortgages have contributed to "downside risk" in the economy, which has culminated recently in the bailout bill by Congress.

Federal Housing Administration (FHA) Commissioner Brian Montgomery said the FHA's goal for homeowners is "sustained ownership." He said the goal is not to give homes to those who financially cannot handle the costs. He called the subprime loan crisis "fool's gold" for its low initial costs followed by higher costs later.

Montgomery, who also is Assistant Secretary of Housing of the U.S. Department of Housing and Urban Development (HUD), said the goals of HUD are to "try and save the hundreds of thousands in foreclosure," and to maker sure the current housing crisis "never happens again."

HUD Director of Single Family Program Development Meg Burns talked about two programs recently enacted designed to help homeowners. She said both the "Housing and Economic Recovery Act of 2008" and the "Hope for Homeowners" rollout are designed to create fair payments for both borrowers and lenders. She said one difference between the two is that the Housing and Recovery Act is designed to help those "in a state of delinquency" due to job loss or medical problems, while Hope for Homeowners is for those "who should never have become homeowners in the first place."

Burns's advice to all homeowners who are having financial difficulties is to "call your lender."

Dr. Peter Orszag Shares Congressional Budget Office's Findings Regarding Health Care Spending With the Senate Budget Committee

Dr. Peter Orszag, Director of the Congressional Budget Office (CBO), testified today before the Senate Budget Committee regarding the crisis generated by increasing health care costs.

In testimony that Chairman Kent Conrad (D-ND) called “sobering,” Dr. Orszag displayed CBO’s projections that health care spending could double by 2035 and become 20% of the economy by 2082 should current policies and practices remain in place. He stated that such high expenditures cannot be allowed to take place.

CBO’s analysis finds that non-Medicare, non-Medicaid health care costs are rising at alarming rates, due in large part to rapid expansion in medical technologies and capabilities; that is, the variety of care continues to increase, expanding costs. Other factors contributing to this increase include increased incidence of obesity, spending per obese person, aging of the population, and industry incentives to provide more health care regardless of quality.

Dr. Orszag highlighted extreme expenditure differences across regions and examples of some hospitals spending up to twice as much as others for the same treatment. He that in his research he had been faced with the ironic question, “How can the best medical care in the world cost twice as much as the best medical care in the world?”

Given the severity of the consequences of inaction, Chairman Kent Conrad (D-ND) and ranking member Judd Gregg (R-NH) shared their intention of going to mark-up on a proposal to resolve this crisis in a bipartisan fashion.