ABA Banking Journal - October 2008 - (Page 7)

briefing FAN/FRED FALLOUT Answers to some questions about the FHA program, which was due to begin Oct. 1 INSIDE BRIEFING FAN/FRED FALLOUT: Covered bonds gain interest after GSE takeover . . . . . . . . . . . . . . . . . p. 11 Snapshot: Branch sales sag to ten-year low . . p. 8 ABA Resources . . . . . . . . . . . . . . . . . . . . . . p. 15 Remembering Joe Kizzia. . . . . . . . . . . . . . . p. 63 Then & Now: Late ‘60s saw birth of that long-lasting favorite—Reg Z . . . . . . . . . . . . . . . . . . p. 64 Bankers’ view of the new Hope for Homeowners program T he financial wreckage of recent weeks means that potentially thousands of people around the country, and especially in the New York metro area, could soon be joining the ranks of those who cannot make their mortgage payments. That represents an ironic twist that may have more than a few people thinking, “just desserts.” Whatever your view on that, their situation swells the ranks of homeowners facing foreclosure without some help, which will only prolong the downward spiral of home prices. Title IV of the Housing and Economic Recovery Act, signed into law in July, could provide some relief—not just for Lehman Brothers employees, but potentially for hundreds of thousands of at-risk borrowers. Entitled “Hope for Homeowners,” Title IV is a voluntary program that permits the Federal Housing Administration to refinance up to $300 billion in loans, providing guarantees (really insurance) on refinanced loans to help distressed users of subprime, Alt-A, and other exotic loan types move into fixed-rate mortgages they can afford. “Permits” doesn’t quite describe the intense political pressure FHA and its parent—the Department of Housing and Urban Development—are under to get the program ramped up quickly, and to have it assist large numbers of people. The start date was set for the first of this month, and as of mid September, FHA was working feverishly to meet that, with the help of banking regulators, one of whom—the FDIC—sits on the program’s Oversight Board, along with Treasury and HUD. The following Q&A on the program was put together from various sources. These include ABA materials; interviews with two bankers, both mortgage lending veterans; and input from FHA. Some details of the program were still being hammered out as this was being written. By William Streeter, editor in chief, bstreeter@sbpub.com What is the goal of the program? Basically to prevent foreclosures. “To provide aid to distressed borrowers currently trapped in mortgages they cannot afford,” to quote from FHA’s consumer-oriented Hope for Homeowners website (www.hopeforhomeownersprogram.org/). By preventing foreclosures, the program would help stabilize neighborhoods and home values, and, on a larger stage, help restore confidence, liquidity, and transparency to the credit markets. ABA BANKING JOURNAL/OCTOBER 2008 7 Subscribe at www.ababj.com http://www.hopeforhomeownersprogram.org/ http://www.ababj.com

Table of Contents for the Digital Edition of ABA Banking Journal - October 2008

ABA Banking Journal - October 2008
Contents
Editor’s Column
A Banker's View of FHA's "Hope for Homeowners" Program
Snapshot: Branch Sales Sag to Ten-Year Low
Covered Bonds Gain Interest after GSE Takeover
ABA Chairman’s Position
ABA Resources
Hot, Web, and Green
Rethinking Segmentation
Still Pushing the Envelope
Keep Regulation Functional
Capital Windfall?
Mortgage IT: Not This Year's Hot Property
Case in Point: Looking for Sales in All the Right Places
Put Your BSA/AML Program into Shape
Mailbox
Banker’s Mart
To Advertise/Index of Advertisers
Remembering Joe Kizzia, Veteren Editor of ABA Banking Journal
100th Anniversary: Then & Now
The Economy

ABA Banking Journal - October 2008

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