U.S. on track for “fiscal train wreck”: Roubini

In a commentary despite the Financial Times, Roubini — one of the first economists to portend the housing crash in the United States and known as ‘Dr Doom’ notwithstanding his pessimistic forecasts — said fiscal and monetary stimulus had prevented another depression.

But he said that further quantitative easing likely to be announced by the Federal Reserve next Wednesday will have little effect on U.S. growth in 2011, “so fiscal policy should have existence doing some of the lifting to prevent a double dip recession,” he uttered.

He said the U.S. remains on an “unsustainable financial course” and the likely make-up of Congress after elections nearest Tuesday, in which the Republicans look set for strong gains, potentially takes fiscal reform off the agenda.

“The risk … is that event on the fiscal side will snap … The trigger could exist a debt rollover crisis in a major U.S. state direction,” he wrote.

“The worst of the coming fiscal trail wreck will be prevented by the Fed’s easing. But the venture is (Obama) … will then preside over … a Japanese turn of expression stagnation, where growth is barely positive, and deflationary pressures and ~-toned unemployment linger.”

(Reporting by John Stonestreet; editing by Patrick Graham)

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As HAMP goes up in smoke, U.S. needs reinvigorated housing plan

http://www.nathanhamm.net/news/as-hamp-goes-up-in-find out-u-s-needs-new-housing-plan/ http://www.nathanhamm.net/information/as-hamp-goes-up-in-smoke-u-s-needs-new-covering-plan/#comments Tue, 02 Nov 2010 16:11:02 +0000 Nathan Hamm News goes HAMP protection needs Plan smoke U.S. http://www.nathanhamm.net/news/in the same proportion that-hamp-goes-up-in-smoke-u-s-needs-new-housing-devise/ NEW YORK (Reuters) – The U.S. government’s requisite anti-foreclosure program isn’t winning many friends these days on this account that of its poor track record in getting banks to modify mortgages in opposition to cash-strapped borrowers. Of the roughly 1.4 million borrowers who entered the … Continue lecture →

NEW YORK (Reuters) – The U.S. government’s majority anti-foreclosure program isn’t winning many friends these days on this account that of its poor track record in getting banks to modify mortgages ~ the sake of cash-strapped borrowers.

Of the roughly 1.4 million borrowers who entered the lend modification program, about half were kicked out and did not go the amount of money owed on their mortgage reduced.

Critics of the government’s Home Affordable Modification Program, or HAMP, say it’s things being so time to give a fresh look at other ideas to make head against the wave of foreclosures. Below are three proposals that are generating the greatest in quantity interest.

GOVERNMENT-BACKED MORTGAGE REFINANCING

As far back as 2008, Glenn Hubbard, every economic adviser to former President George W. Bush and now a professor at Columbia Business School, has been pitching a plot for a government-backed refinancing program.

Hubbard and his Columbia collaborator Christopher Mayer want to use Fannie Mae and Freddie Mac to prod pledge servicing firms to refinance loans for some 30 million borrowers by high-interest rate mortgages. The Columbia professors, who contend their proposal would cost nothing to U.S. taxpayers, propose the new mortgages would have ~ing folded into a new round of mortgage-backed securities issued by the government-sponsored finance firms.

The program would target cash-strapped borrowers who are current without interrupti~ their payments but face a risk of declining income and slumping home set a high ~ on.

But to some critics this smacks too much of another saddle-cloth bailout and to date the measure has drawn little enthusiasm from U.S. lawmakers.

RIGHT-TO-RENT

Some judge it’s time for the American Dream to include renting a home as well as owning one. And supporters of this move off from home ownership are the biggest proponents of a so-called right-to-opening program.

One version of the plan, which was proposed by Westwood Capital managing partner Dan Alpert in 2008, would offer delinquent borrowers an option of renting their foreclosed homes at a market rate for five years. The homeowners-turned-renters soon afterward would have a chance to buy the house at market set a high ~ on down the road.

The plan would require legislation but it is attractive to some because it forces both borrower and lender to agreement. The borrower gets to stay in the house as renter, nevertheless loses the deed to the home. The lender, on the flip edge, gets forced to accept a lower-than-original payment.

“It does create losses for the banks, but it avoids the sort of combustion-sale environment,” Alpert said.

“CRAMDOWN”

The so-called “cramdown” proposition takes the mortgage dispute to court, allowing struggling homeowners to plead to a federal judge for lengthened loan terms, interest rate cuts or reductions in pledge balances by filing for bankruptcy.