Democrats Reject Stimulus Proposal to Lower Mortgage Rates to 4%
Posted on | February 5, 2009 | 20 Comments
On February 5th, 2009, Democrats decided against a plan that would offer mortgage rates around 4% to millions of homeowners. Party leaders stated that the proposal was terribly flawed and would be unsuccessful in reviving the housing market. John Ensign, R-Nev, proposed an amendment to “fix housing first” by offering mortgage rates as low as 4% to homeowners throughout the United States.
Republicans promoted this as a part of the $900 billion economic recovery plan. The Ensign amendment would offer 30 year mortgage rates between 4% and 4.5% interest for qualifying homeowners who want to refinance their current mortgage. Republicans feel that over 40 million homeowners could save hundreds of dollars each month by refinancing at lower rates.
Democrats disagree as they feel that the banks would benefit by receiving thousands of dollars in fees and closing costs for each mortgage refinanced. They also feel that refinancing a home that is currently being occupied will not help the problem of all the vacant homes and excess inventory in the United States right now.
Both sides have their arguments, but how do YOU feel about this? Would you like to see money going into making mortgage rates lower to put money back into your pocket or do you feel that this will just help the banks?
Related Posts:
Republicans Want Low Rate Mortgage in Stimulus – Obama Agrees
Senator Dodd is Refinancing; What Rate Will HE Get?
Obama Promises to Lower Mortgage Costs; How Do You Benefit?
Comments
20 Responses to “Democrats Reject Stimulus Proposal to Lower Mortgage Rates to 4%”
Leave a Reply
February 5th, 2009 @ 8:08 pm
Reduce the Rate to 4% or lower for everyone & make a law that prevents from the Banks not receiving thousands of dollars in fees and closing costs for each mortgage refinanced. (make Law That Reads Bank can charge Maximum of $500.00) & consumer can get Cashout not more than $10k-20k added to their Mortgage if they want. this keeps economy going, consumer will have cash to spend whatever they want or option Number 2
Everyone in USA stop paying their Mortgage for 1 or 2 Years since everyone is going through rough times & consumer will Have extra cash to spend, or option 3
Just Hit Reset Button – everyone in USA we will start all over again no more Debt, No car payment or House payment, becuase Tax payers already paid for the Bailout anyway – I know Bush open Homeland Security Like FBI, CIA, Secret Service, Our Marines, Army, AirForce & Local Police & all other intellegent agencies were not enough or good enough or smart enough, its like StarBucks opens another starbucks inside startbucks, so please open another congress inside congress, another wall street inside wall street, another Banks on each inside Banks & so on yes I could go on but I like to go to my bed sometime 2night, but this time please we need someone with a brain, little not smart but common sense, enough with printing money out of nowhere & giving same people who failed, its becoming like some people that I heard who collects food stamps/welfare from government everymonth & don’t want to work – why work becuase I can sit at Home & get Foodstamps/welfare from USA Government – this is not the america that I knew & even I noticed – you don’t wanna know who I am ?
February 5th, 2009 @ 10:19 pm
You can be sure that if the republicans wrote the details then the bankers will get over big time. After all, the wealthy are their constituency. Look at how they crafted the prescription drug bill, they touted it as being for sick folks, but in fact it was designed as a huge windfall for the pharmaceutical industry. Its just the way they roll, everything they do or want to do is designed to benefit the wealthy the most.
February 6th, 2009 @ 1:27 pm
Inspite of the economic bail out monies given to the banking institution, majority of these institutions, if not ALL, are not working with homeowners on modifying loan mortgages. The Banks do whatever their board wants which is to reinvest to increase dividends to shareholders. I totally agree with mr nobody. Overall, the stimulus package will NOT be as effective as mr. Obama thinks since there isn’t any governing body which will monitor the bail out money specially to the banks.
February 6th, 2009 @ 1:57 pm
The 4% mortgage rate is a good idea that should be targeted for new home construction only. Banks allready have enough incentives for refinancing existing loans. New home construction(however modest)with all the connecting industries is necessary to turn the economy around.
February 6th, 2009 @ 2:17 pm
How can this help those that are most in need? You cant refinance a loan without great credit or one that is in forclosure!
February 6th, 2009 @ 3:11 pm
I agrre with mr nobody that mortgage rates be lowered and limit amount of bank fees charged
February 6th, 2009 @ 5:18 pm
Hello.
This 4% plan is wrong.
The people on the front lines of this problem
know that we have to sell all the bank owned homes and people that have a home to sell that need a short sale or
lose thier home due to foreclosurer.
The best plan would be a $7,500-$15,000 tax credit
for any home purchase with no repayment.
This would put the money where it will correct the problem very fast.
I believe that is the goal and would probably cost less than just handing the money to Banks and let
them sit on it hopeing for something to happen.
Dick Watland
February 6th, 2009 @ 6:41 pm
how dumb can the dems be letting responsible folks refi to 4% is getting to the heart of the housing mess. it will stabilize housing market . prevent massive additional forclosures . and stop home prices from falling further. eventually empty homes will be bought up this is where our money needs to go. wake up dems
February 6th, 2009 @ 6:44 pm
even if the greedy banks make money on refi,s its worth it to fix the hosing crisis although passing a law to prevent these charges would be great the banks have already raped the american taxpayer enough
February 6th, 2009 @ 6:58 pm
I sit here reflecting on what I have read shaking my head sadly. I am one of many former GM workers that lost their jobs during Bush’s presidency. I noticed that this trend started within months of Bush having been sworn in. One plant closing after another. I remember weeping openly after finding out he was given the first election. Knowing that he was very Anti-Union, I DID NOT want him in the White House. I cried out in anger and frustration after learning he had been elected for a second term. I knew I would not have a job before he left at the end of his second term, and I was right. I had no idea that they would close the only plant that they had that had kept them afloat for the past two decades due to outrageous gas prices and a steep decline in the sale of SUV’s. The anger and dismay I felt was only intinsified by one of his more idiotic rationalizations. Now, I don’t make a habbit of getting in over my head so I was somewhere this side of furious when I read that Bush would not help homeowners facing forclosure because they could not afford the house when they bought it. When I purchased my house over eight years ago, I was more than able to afford it. I paid my house payment, first and second morgage, as well as two car payments with ease and had money left over for groceries, utilities or whatever I happened to need to pay. Being broke and unemployed, when I read that they voted down lowering the interest rate to 4%, I choked on my anger and rage. I receive unemployment so I cannot refinance my house until I find a job. What few jobs come available in my area are being fought over by over 4000 laid off GM workers and how ever many Delphi workers are now out there as well. I would dearly love to find a job, but what can I do? There are only so many jobs available and there are far more people out there with more experience than I have so I don’t stand much of a chance. Yet I keep trying. Is it too much to ask for that they try to meet us half way? I am not facing forclosure, but having the extra money that I would save if they lowered EVERYONE’s interest rate to 4%, versus my 10 and a half to 14%, depending on the month, would make quite a bit of difference in my world.
February 7th, 2009 @ 7:58 am
The Democrats obviously have no intention of fixing our housing crisis and economy. Folks, this is a great idea that should have passed without opposition. Who cares if banks make thousands in fees and closing costs. Good, that would be less taxpayer money paid to them by way of bailout for absolutely nothing at all in return. If rates were lowered to 4%, 40 million people would refinance and add several hundreds of dollars into their budget as disposable income, which could be spent to help raise the demand on goods and services thus forcing businesses to hire more folks. People who lost their home and have been forced into apartments could now enter into a depressed housing market and get into a home THAT THEY CAN AFFORD at a good price. Plus with a 4% mortgage rate and a $15,000 credit, they would get instant equity and low payments. This plan would help everyone while preserving home values. I too am furious that our Congress feels that STD research and other frivolous spending ideas would even compare to this fantastic idea. Lower interest rates are absolutely stimulus for our economy. If these folks in Congress do not understand this, then I contend that they are way out of touch with the American people.
After all…isn’t this our money!!!!
February 7th, 2009 @ 10:17 am
Banks need to make money morons because then, they will have money to lend out. It is so sad to think that 50% of Americans simply have no fundamental understanding of economics and that they just think that some exterior force will make their lives better or that Bush hurt them when they had nothing to lose in the first place because they are deadbeats like our Marxist President.
I refuse to expand on this one thought because I know that over 50% of the readers will blame Bush, when we need to blame the Community Re-Vitalization Act, enacted by Carter that forced banks to lend money in rough hoods to deadbeats. Later, Clinton expanded that idiotic initiative with guarantee from FREDDY and FANNIE and then more loser dead beats got loans that are now in default because they went out and bought Escalades that they ALSO could not afford.
Repulicans would never have been for some initiative to lend money to deadbeats and losers. Only a Dem would be for that and that proves that Bush did not cause the meltdown which was started in 1965 with LBJ’s Great Society of Dad Beats and now we see what we have wrought.
Producers simply cannot make enough money to support too many non producer deadbeats. The numbers do not add up, but then, most deadbeats are HS droputs anyway and cannot do Math …………so they blame Bush because that requires no intellect being in gear.
February 7th, 2009 @ 8:48 pm
[...] looks like there is going to be a great increase of individuals who are looking up subprime rates in the very near future. It seems quite sad, but [...]
February 7th, 2009 @ 8:52 pm
Hold on, I am one of those people who got one of those loans that Carter and Clinton put into motion. I paid my house off and I bought another one. I pay my bills. There were people who bought more house then they could afford (Greedy). People who wanted to keep up with the Jones family. A lot of people who lost their houses were not the people you say. Some where mid income greedy people who thought they could get more house by taking interest only loans and when it came time to make that 5 or 10 year payment they could afford it nor could they sell. Damn, I hate the fact that you and the GOP want to blame the lower income people for this crap. I blame the people who bought the houses for not doing their home work but, I want YOU to know that a lot of lower income people still have there homes and I am one of them! I did my homework! Now kiss where the sun don’t shine!
February 8th, 2009 @ 8:13 am
I don’t think any plan will be perfect. While it’s true that this plan would give money back to the banks, the banks are in trouble anyway, so I kind of see it as a “kill two birds with one stone” deal. Also, other areas of our economy are suffering as well, prices are going up on groceries and everything else, so more money in homeowner’s pockets each month could help to increase spending and maybe boost other areas of the suffering economy as well.
February 9th, 2009 @ 6:08 am
Its not just the lower income that have defaulted on these mortgages, it runs the spectrum of economic classes. the problem and the point here is that government intervention is harmful, maybe not inititally but ultimately. Prime example, the clinton’s push to back freddy and fannie to make a more loans to unqualified americans. Great idea at first, infact everyone was snowed because of the success. Now look where we are. the problem is that republicans were screaming at the top of the bell tower to revise this legislation, but the dems were in opposition with no foresight(barney frank). Capitalism works just like evolution, survival of the fittest. with out a overly controling species in the ecosystem, the wild will ebb and flow in unison and find its equilibrim. with out governement america will find its equilbrim, the best competition is perfect competition(one with out taxes or outside factors)
February 9th, 2009 @ 7:59 am
The 4% proposal was single handedly the one proposal in this whole pork filled “stimulus” bill that was going to actually stimulate the economy. Think about giving every homeowner a couple of hundred extra bucks a month and watch consumer spending start up again. Think about giving a prospective credit qualified homebuyer a mortgage payment of either, lets say $1200/mon vs. $1400/mon. If you ever bought a home that is a huge difference and could easily put those on the fence between renting and owning right over.
The US representatives and senators who do not support this should be removed from office as they have no concept of reality and what the average citizen is going through.
I’ll be happy to pay resonable refi fees as they are paid back rather quickly.
Anyone who doesn’t support this is an idiot.
February 10th, 2009 @ 7:08 pm
This was my last chance. If I could get a lower payment and more money in my pocket each month my family and I would of saved our home. Now all is lost and we will just have to wait for the day we are thrown to the street.
February 12th, 2009 @ 11:39 am
I strongly support a fixed 30-year mortgage rate of 4%. The argument that banks unfairly benefit by instituting such a program does not pass the common sense test.
I am Active Duty Military and I bought my Southern California townhome in early 2007 upon duty station transfer from Virginia. I put down over $100K that I’d been saving since I was an E-1 (that’s a very junior sailor for you civilians) in order to lower the monthly payment and avoid paying PMI.
This is my first home. I decided to buy because I was considering leaving the military and making Southern California my home. After a deployment to Afghanistan and with a baby on the way, I’ve decided to get out. I’m honestly worn out by more than seven moves over the last ten years, I want to settle down into my own community, and raise a family.
I have a fixed 5-year mortgage that will become adjustable after the 5th year (“5 year ARM”). I’ve considered refinancing since the housing bubble burst and have watched mortgage rates intently. Since making the decision to leave the military and settle down, I’ve become interested in establishing a long-term mortgage.
The most basic consideration for anyone contemplating refinancing is the cost of refinancing (in fees, etc.) versus the monthly mortgage savings. It is not a mystery. So why make the assertion that banks will unfairly benefit from establishing a 4% 30-year fixed mortgage rate? Its consumers’ responsibility to make the cost comparison and the consumers’ decision to refinance. I would only refinance if it made financial sense to do so… Whether or not the banks make a profit, or even how much profit, is moot.
Legislation that would fix a 4% mortgage rate would ideally also cap associated refinancing fees; but even if it didn’t, the market would drive down associated costs when banks compete for the huge refinancing market.
Whatever happens and whatever your opinion, I wish you all the best and hope you’re able to make ends meet. Remember that no matter how bad we have it, it is in our power to change our circumstances. Billions of people on this planet don’t have the same right.
February 18th, 2009 @ 9:29 pm
Let’s not have medium or large sized companies make any money!!! Let them all go out of business!!! Who needs their stuff? I want to eat a doughnut!!! If they make their bed, let them eat it!!! Why do poor people smell? Why don’t rich people fart? What’s wrong with this world!!! I like Mexicorn. What ever happened to Mexicorn? Oh yeah, a large sized company used to make it, but now they’re out of business!!!