Bush's Solution To The Foreclosure Crisis: "HOPE NOW" Or Does "Hope" Float?

Shane-O's picture

Today, President Bush unveiled his “solution” to the record rate of American home foreclosures in a speech from the Roosevelt Room in the White House. The president’s plan relies almost entirely the cooperation of a private sector group called the HOPE NOW Alliance.”

I’m sure we are all so relieved now. I’m so HOPE-ful! What could possibly go wrong with a Bush plan?

Other than the vagueness of the “plan,” deficiencies in enforcement and complete lack of qualification criteria, who could question such a bold step by our ruler to prolong his artificial economic boom?

From the “Fact Sheet: Helping American Families Keep Their Homes” issued by the White House in coordination with the President’s speech:

President Bush announced that representatives of HOPE NOW have developed a plan under which up to 1.2 million homeowners could be eligible for assistance. Many individual homeowners feeling financial stress have “adjustable rate mortgages,” which typically start with a lower interest rate and then reset to a higher rate after a few years. The HOPE NOW plan is designed to help sub-prime borrowers who can at least afford the current, starter rate on a sub-prime loan, but will not be able to make the higher payments once the interest rate goes up. HOPE NOW members have agreed on a set of new industry-wide standards to provide systematic relief to these borrowers in one of three ways:

1. Refinancing an existing loan into a new private mortgage;

2. Moving them into an FHASecure loan; or

3. Freezing their current interest rates for five years.

What are these “industry-wide standards?” I called 1-888-995-HOPE, the toll-free number provided to answer such questions.

I spoke with a very nice woman named “Candice.” I asked, “What are the criteria for a person who wishes to move to an FHASecure loan or to freeze their current interest rate for five years.”

Her answer, while quite honest, lacked that “industry-wide standard” touted by the President. Candice informed me that such decision and criteria were done on a lender-by-lender basis. Mortgage companies’ participation is not only voluntary, but the standard by which they might grant the relief proclaimed by the White House is on a case-by-case basis and each lender has its own standards.

So much for “industry-wide.”

The only “service” the 1-888 “HOPE NOW” number provides, according to Ms. Candice, is “credit counseling.” No information, only a patch. Surprise!

So as President Bush blames consumers for overextending in buying homes they could not afford (rather than faulting lenders who sold defective and deceptive home mortgage products), he now offers only a window-dressing solution to keep his economy artificially inflated.

There is no solution in the “HOPE NOW” initiative. Only empty and vague promises.


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lambert's picture

"Claw back"

We should claw back all the commissions and the inflated salaries from the pushers CEOs and financial engineers who enriched themselves by creating this mess. Sure, it won't cover the billions that vanished in the bubble, but it will get their attention and maybe prevent another occurrence. Crime should not pay, especially the rich.

We. Are. Going. To. Die. We must restore hope in the world. We must bring forth a new way of living that can sustain the world. Or else it is not just us who will die but everyone. What have we got to lose? Go forth and Fight!—Xan

First they ignore you, then they ridicule you, then they fight you, then you win. -- Mahatma Gandhi

Hope Floats

Great article. This "hope" solution that is offered by bush is just something to make it appear they are really doing something about the problem. The reality is the same lenders who are part of the alliance are the ones who are partly to blame. So they try & look like the good guys by covering up their mess.

lambert's picture

What bugs me...

... is that we still don't know how to price this stuff (yes?) because we don't know how much rot there is and who holds it or how it's leveraged. Since the crisis has been happening at least since August, that does not bode well either for the scale of the problem, or for the quality of our policy-making.

We. Are. Going. To. Die. We must restore hope in the world. We must bring forth a new way of living that can sustain the world. Or else it is not just us who will die but everyone. What have we got to lose? Go forth and Fight!—Xan

First they ignore you, then they ridicule you, then they fight you, then you win. -- Mahatma Gandhi

lambert's picture

Ha! Subprime spam!

I guess it was inevitable....

And speaking of A.R.M. mortgages... I guess I'm surprised more people aren't exercising their Second Amendment rights on this. I guess it's easier to throw the keys in the mail, and bail.

We. Are. Going. To. Die. We must restore hope in the world. We must bring forth a new way of living that can sustain the world. Or else it is not just us who will die but everyone. What have we got to lose? Go forth and Fight!—Xan

First they ignore you, then they ridicule you, then they fight you, then you win. -- Mahatma Gandhi

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