Hopes for saving homeowners from foreclosure dwindled further as Washington tries to iron out differences on a bill..this prolonged help will put more foreclosures in the coming months presenting more frustration for homeowners already in default.   On the other hand, opportunities will arise for those brave buyers.

JUST WHEN IT APPEARED THAT A BI-PARTISAN MAJORITY IN THE U.S. SENATE HAD ENOUGH VOTES TO SHOVE THROUGH A BILL THAT THEY SAID WOULD SAVE 400,000 HOMEOWNERS FROM FORECLOSURE, TWO NEW FACTORS ENTERED THE PICTURE AND CAUSED DOUBTS ABOUT THE SUCCESS OF THE BILL NOW BEING DEBATED. 

 TO BEGIN WITH, NINE REPUBLICAN SENATORS WROTE A LETTER TO SENATE MAJORITY LEADER HARRY REID ASKING THAT DEBATE ON THE BILL BE DELAYED.  THE SIGNERS TO THAT LETTER INCLUDED JIM DEMINT OF SOUTH CAROLINA,  TOM COBURN AND JIM INHOFE OF OKLAHOMA, SAXBY CHAMBLISS OF GEORGIA, JIM BUNNING OF KENTUCKY, DAVID VITTER OF LOUISIANA, ROGER WICKER OF MISSISSIPPI, MIKE ENZI OF WYOMING AND JOHN ENSIGN OF NEVADA.  REPUBLICAN SENATE LEADER MITCH MCCONNELL OF KENTUCKY REFUSED TO SIGN THIS LETTER.  ALSO REFUSING TO SIGN THE LETTER WERE REPUBLICAN WHIP JON KYL OF ARIZONA AND SEVERAL OTHER SENIOR REPUBLICAN SENATORS.  MCCONNELL SAID:  “WE ARE GOING TO GO FORWARD.  LET THE SENATE WORK ITS WILL.”   DEMOCRATS PUSHING THE BILL WANT TO GET IT VOTED ON FAST, THEN WORK OUT MINOR DIFFERENCES WITH THE HOUSE VERSION OF THE BILL PASSED ALREADY.  THE BILL WOULD BRING INTO BEING A MULTI-BILLION DOLLAR MORTGAGE INSURANCE FUND TO BACKSTOP FAILING HOME LOANS.  IT ALSO CALLS FOR BILLIONS OF DOLLARS IN EMERGENCY HOUSING RELIEF PLUS NEW MORTGAGE FINANCE REGULATORY POWERS AND DUTIES FOR THE FEDERAL RESERVE.  THE FED WOULD OVERSEE FANNIE MAE AND FREDDIE MAC, AMERICA’S TWO GIANT GOVERNMENT-SPONSORED PRIVATE SOURCES OF MORTGAGE FINANCE.  THEY SELL NOTES AND BONDS TO RAISE FUNDS AND THEN PURCHASE MORTGAGES FROM BANKS AND OTHER LENDERS, REPLENISHING THEIR SUPPLY OF CAPITAL TO MAKE NEW LOANS.   THE NINE REPUBLICANS WHO SIGNED THE LETTER SEEKING TO DERAIL THE HOUSING BILL SAID THEY NEEDED MORE TIME TO STUDY IT.  SEN. REID, THROUGH A SPOKESMAN, RESPONDED: “THIS IS DISGRACEFUL. WE HAVE BEEN TRYING TO ADDRESS THIS HOUSING CRISIS FOR MONTHS, BUT REPUBLICANS HAVE STOOD IN THE WAY EVERY STEP ALONG THE WAY.  IF ANYONE HAD ANY DOUBT THAT REPUBLICANS ARE SATISFIED WITH THE STATUS QUO… THIS PETTY, PARTISAN MOVE SHOULD PUT THOSE QUESTIONS TO REST.”   REID ALSO SAID THAT IF THEY HAD NOT YET FAMILIARIZED THEMSELVES WITH THE CONTENTS OF THE BILL AFTER ALL THIS TIME THEY SHOULD ASSIGN THEIR STAFFS TO STAY UP ALL NIGHT, IF NEED BE, TO READ THROUGH THE BILL.  THE REAL REASON FOR THE PROPOSED DELAY IN VOTING ON THE BILL, AS THE NINE SIGNERS TO THE GOP LETTER PRIVATELY ADMITTED, WAS THEIR INTEREST IN FINDING OUT HOW MUCH HELP THE BILL WOULD GIVE TO ONE GIANT MORTGAGE LENDER, COUNTRYWIDE FINANCIAL.  IN RECENT DAYS IT HAS SURFACED THAT TWO LEADERS AMONG THE DEMOCRATIC SENATORS PUSHING THIS BILL RECEIVED MORTGAGES AT SPECIAL DISCOUNT RATES FROM COUNTRYWIDE.  THERE IS LITTLE ENTHUSIASM IN THE OTHER PARTY FOR THAT KIND OF WITCH HUNT.  FOR EXAMPLE, DEMOCRATIC PRESIDENTIAL CANDIDATE OBAMA AND HIS WIFE ALLEGEDLY GOT A MAJOR SWEETHEART DEAL WHEN THEY BOUGHT THEIR BIG HOME.  (HE NOW SAYS HE REGRETS TAKING IT.)  ONLY SOMEONE UNWISE IN THE WAYS OF WASHINGTON THINKS SUCH DEALS ARE  NOT COMMON IN BOTH PARTIES.  BUT A SECOND AND FAR MORE POWERFUL ISSUE RECENTLY SURFACED WHEN IT WAS ANNOUNCED THAT HUNDREDS OF PEOPLE HAVE NOW BEEN ARRESTED FOR ALLEGED MORTGAGE FRAUD AS PART OF AN INVESTIGATION BY THE FBI AND THE JUSTICE DEPARTMENT.   BOTH THE WHITE HOUSE AND THE TREASURY HAVE BEEN TRYING FOR SOME TIME TO GET MORTGAGE LENDERS TO STOP THEIR WHOLESALE FILINGS FOR FORECLOSURE AND INSTEAD MEET WITH EACH INDIVIDUAL HOMEOWNER AND SEE WHETHER FINANCIAL CONDITIONS EXIST TO PERMIT A REASONABLE WORK-OUT PLAN, THUS SAVING THE LENDERS FROM BIG LOSSES AND GIVING HOMEOWNERS A SECOND CHANCE TO STAY IN THEIR HOME.  BUT FEW – ALMOST NONE – OF THE BIG LENDERS HAVE SHOWN ANY WILLINGNESS TO SEEK SUCH A CASE-BY-CASE WORKOUT OF DEBTS.  GIVEN THE FEDERAL ARRESTS FOR ALLEGED MORTGAGE FRAUD, THERE IS NOW GROWING SUSPICION, SOME OF IT EXPRESSED OPENLY, THAT FRAUD MAY HAVE BEEN INVOLVED IN A GREAT MANY OF THE 400,000 MORTGAGES THE CONGRESS IS TRYING TO SAVE FROM FORECLOSURE. THE THINKING IS THAT MORTGAGE HOLDERS WANT TO DUMP THESE DEBT INSTRUMENTS IN THE GARBAGE PAIL AND WRITE OFF LOSSES RATHER THAN HAVE THEM EXAMINED IN DETAIL BY THE FED OR ANY OTHER REGULATOR.  THERE ARE SEVERAL KINDS OF FRAUD ALLEGED.  TO START WITH, SOME MORTGAGE WRITERS FILLED OUT PAPERWORK NEVER SEEN BY BORROWERS, STATING INCOME LEVELS FAR ABOVE THE ACTUAL INCOMES OF BORROWERS.  THAT LET THEM SEEK AND GET FINANCING FOR HOMES MUCH BIGGER THAN BORROWERS COULD ACTUALLY AFFORD.  IN THE PROCESS OF SHOVING THROUGH THESE APPLICATIONS, THE LENDERS ALLEGEDLY ADDED OUT OF NORMAL FEES FOR THEMSELVES.  LENDERS CHIPPED IN BY ADDING PENALTIES SO HIGH FOR REWRITING THE LOANS THAT BUYERS COULD NOT REFINANCE AND AVOID GIANT INCREASES IN INTEREST RATES.  THIS STORY MAY NOT BE OVER YET.    source