No Help for Middle class Americans. Can we get help sooner than later?.

After a year of failed efforts, Congress and the new administration are considering more aggressive measures, including a possible change to bankruptcy law. Homeowner relief could come as part of a new economic stimulus plan, a revised financial system bailout program or as a standalone measure.

So far, progress remains painfully slow. More than 3 million homes have been lost to foreclosure since the housing bubble burst. Roughly one in 10 homeowners with mortgages are either in foreclosure or more than 30 days late in payments — the highest delinquency rate on record.

Without more aggressive measures, another 8 million to 10 million foreclosures are forecast over the next four years, according to Credit Suisse. That amounts to roughly one in six households with a mortgage

It is simply mind-boggling to me that (Congress and the White House) have moved so slowly to address this issue,” said John Taylor, president of the National Community Reinvestment Coalition, which has been lobbying for foreclosure relief.

Congress and the incoming administration are taking a multipronged approach to foreclosure relief.

"Accelerating foreclosures is obviously, in my view, the huge driving problem right now,” said Elizabeth Warren, a Harvard law professor appointed by Congress to chair a panel overseeing the financial bailout. "Until we think in a more comprehensive way, we can't create solutions that will really make a difference," she told Congress last month.

Many of solutions tried so far have been stymied by the legal morass created by the modern mortgage.

In past recessions, it was not uncommon for lenders to work out more affordable terms with borrowers who had fallen on hard times. Bankers often prefer to cut their losses by lowering monthly payments and stretching them out over a longer term rather than bearing the cost of foreclosure. But the complex system of financing the recent housing boom — which was based heavily on the pooling of mortgages that were then sold to thousands of investors — has hopelessly complicated a once fairly simple renegotiation between lender and homeowner.

Multiple classes of investors, each with different claims on the same mortgage, often have conflicting interests. Some will do better with a loan foreclosure while others would profit by keeping the loan performing. Some contracts setting up these pool pay loan “servicers” — the companies that manage mortgage payments to investors — more generous payments for loans in foreclosure and offer little financial incentive to undertake the more costly process of modifying terms.

“You have got to have the investor or their representatives come to the table motivated to do something,” said Taylor. “And that’s currently what we don’t have.”
To break the logjam, Congress is considering various proposals, including both "carrots" and "sticks."

One of the "carrots" is included in a proposed revision to the $700 billion bailout of the financial industry known as the Troubled Asset Relief Program, or TARP

Foreclosure Proposals:

Brankuptcy Law:

A deal between key Democrats and Citigroup opens the door for a measure first introduced a year ago that would allow bankruptcy judges to modify the terms of first mortgages on primary residences -- the only debt excluded from the bankruptcy process.
Under the latest proposal, borrowers must contact the mortgage lender 10 days prior to filing Chapter 13 to give the parties time to work out a modification. If no offer is made by the lender, the homeowner could file Chapter 13 and the judge could then treat as unsecured debt any amount of the mortgage that exceeds the newly appraised value of the home. The judge also could reduce the interest rate and extend the maturity of the loan.

This so-called "cramdown" provision is strenuously opposed by the lending industry, which argues that the risk that a loan will later be modified will increase the cost of borrowing.

FDIC PROGRAM:

Using Troubled Assets Relief Plan funds, the Treasury would pay mortgage servicers $1,000 for every modification they make under the program. Modifications must bring a borrower’s mortgage debt-to-income ratio to 31 percent.
Mortgage servicers start by reducing interest rates before extending the maturity to up to 40 years. If those steps do not work, the servicer defers principal. That means the borrower does not pay interest on part of the loan, though he must repay the full balance when he sells or refinances the house.

Hope Program:


Approved last summer under the Housing and Economic Recovery Act, the Hope for Homeowners program has $300 billion available to refinance troubled borrowers into FHA mortgages. Legislative restrictions on the program have made it largely ineffective.
Congress is expected to eliminate many of these restrictions as part of the TARP revision, which means lenders will absorb a smaller loss if they refinance a troubled borrower into an FHA mortgage.

GSE/FHA Loan Program:

The maximum limit for Freddie Mac, Fannie Mae and FHA loans dropped to $625,500 on Jan. 1. Many Democrats, including House Financial Services Chairman Barney Frank, support restoring the maximum loan size to the prior limit of $729,750.
This would help lower interest rates on these mortgages. FHA is becoming the program of choice for first-time buyers. Higher limits also put more homes in higher cost coastal cities into play for FHA.

Tax Incentives:

Spurred by the homebuilding industry, Democrats are working on tax strategies to help with the housing crisis. These include a tax credit available to all homebuyers, not just first-timers, of $7,500 -- and perhaps more.
The mortgage interest deduction may be extended to taxpayers who don't itemize. Tax incentives may also be provided to owners who rent out vacant properties.

Lower Mortgage Rates:

So far, the Federal Reserve has led the move to lower longer-term interest rates after targeting short-term rates as low as zero percent. Congress is looking at additional efforts to push mortgage rates as low as 2.99 percent.
These measures could include providing an explicit government guarantee on mortgages issued by Freddie Mac, Fannie Mae and federal home loan banks.

Rising depression. Suicide rates for the Mortgage crisis. No Help at all for middle class americans.

Towards our leaders & institutions; they are naive beyond belief. Although being used, abused & oh so confused by their so-called leaders, big media and this one-sided economic system; they keep on chuging along still wanting to believe in the american dream they are sold every minute, every day.

The real whiners are that 1% of happy few plutocrats and their 90% + of the whole shabang. They are the ones we are bailing out. They are the ones constantly lobbying & begging for more deregulation & tax cuts. They are the welfare corporations slaughtering US's middle class and making them feel guilty about it too…

There’s this big squeeze on the nation’s workers, wages have been flat, health and pension benefits are getting worse, at the same time corporate profits have gone up very, very nicely. Employee productivity has gone up 15, 20 percent, yet wages have been flat, plus companies are pressuring workers, you know, to work harder and harder.

And that’s part of a broader health crisis in the nation, where, since the year 2000, even though we’ve had pretty good economic times until the last few years under the Bush Administration, nine million more Americans are out of work than was the case in 2000. So now, almost 50 million Americans, nearly one-sixth of the workforce, is uninsured. And you think how crazy that is, in ways. You know, we’re the world’s wealthiest nation, yet one-in-six workers are out of work.

Wall Street is exerting much more pressure on corporations to maximize their share prices, as you know, which means maximize profits, which often translates into lowering costs and especially lowering payroll costs. So a lot of managers will say, you know, the area where they have most flexibility to reduce cost and increase profits is on payroll. So that’s why we’re seeing all these waves of downsizing and Suicide is becoming an increasingly popular response to debt.

For more than two decades, the couple had lived in their three-level house, where the elms outside blazed with yellow shades of fall and their four golden retrievers slept in the yard. The town had always been home, with a lazy river and rolling hills dotted by gnarled juniper trees.

Yet just before lunch on Oct. 23, the Donacas closed all their home's doors except the one to the garage and left their 1981 Cadillac Eldorado running. Toxic fumes filled the home. When sheriff's deputies arrived at about 1 p.m., they found the body of Raymond, 71, on the second floor along with three dead dogs. The body of Deanna, 69, was in an upstairs bedroom, close to another dead retriever.

"It is believed that the Donacas committed suicide after attempts to save their home following a foreclosure notice left them believing they had few options," the Crook County Sheriff's Office said in a report.

Their suicides were a tragic extreme, but the Donacas' case symbolizes how the housing crisis is wrenching the emotional lives of legions of homeowners. The escalating pace of foreclosures and rising fears among some homeowners about keeping up with their mortgages are creating a range of emotional problems, mental-health specialists say. Those include anxiety disorders, depression and addictive behaviors such as alcoholism and gambling. And, in a few cases, suicide.

Crisis hotlines are reporting a surge in calls from frantic homeowners. The American Psychological Association (APA) and other mental-health groups are publishing tips on how to handle the emotional stress triggered by the real estate meltdown. Psychologists say they're seeing more drinking, domestic violence and marital problems linked to mortgage concerns ? as well as children trying to cope with extreme anxiety when their families are forced to move.

"They're depressed, anxious. It's affected marriages, relationships," says Richard Chaifetz, CEO of ComPsych, a Chicago-based employee-assistance firm that is counseling homeowners over mortgage fears. "People tend to catastrophize, and that leads to depression. Suicide rates go up. We see an increase in drinking, outbursts at work, violence toward kids. Before, their houses were like ATMs," as they rose in value. "Now, they feel trapped.

Foreclosure filings surged 65% in April compared with the same month last year, according to a report Wednesday by RealtyTrac. One in every 519 households received a foreclosure filing last month, and the number of homes with foreclosure activity in April was the highest monthly total since RealtyTrac began issuing the report in January 2005.

Don Donaca, Raymond's brother, says it's hard to understand the suicide, but he thinks the pending foreclosure led to their deaths.

"He got so deep in debt he couldn't figure out what else to do," says Don, 74, a retired sawmill worker in Prineville. "I guess a guy would have to walk a few miles in his shoes to understand."

Financial concerns at the top.

Many other homeowners are at risk of less-severe, but still significant, psychological distress: One in seven homeowners worry that they won't be able to make their mortgage payments on time over the next six months, according to an April Associated Press-AOL Money & Finance poll, and more than one-quarter fear their home will decline in value during the next two years.

ComPsych says financial concerns are now the top issue the firm's counselors are hearing in calls from clients. Calls about financial worries have surged 20% over last year; those related to mortgage problems have doubled.

"It's escalated to the No. 1 issue because of the housing crisis," Chaifetz says.

Half of Americans identify housing costs, such as rent or mortgage payments, as significant sources of stress, particularly on the East and West coasts, a 2007 survey by the APA says. Sixty-one percent in the West, and 55% in the East (compared with 47% in the Midwest and 43% in the South) reported housing costs as a very or somewhat significant source of stress.

"The problem affects the whole spectrum, not just people losing their homes," says LeslieBeth Wish, a psychologist and social worker in Sarasota, Fla. "The stress exacerbates what is already there. It brings to the surface problems that were often already there, like marital problems. There is so much blaming people for the situations they're in, and that adds to it."

One of Wish's patients was semiretired when she bought a home in 2005 in southwest Florida as an investment that she hoped to "flip," turning a profit. The woman now owes more than the house is worth and can't sell it.

Wish says her client has developed anxiety, dwelling on her financial situation from the time she wakes up to the time she goes to sleep. Other clients, Wish says, are reporting physical symptoms such as headaches and stomach pains stemming from anxiety over their mortgage situation.

ComPsych's counselors are hearing similar stories of the mental-health toll caused by the housing slump. At the request of USA TODAY, ComPsych's spokeswoman Jennifer Hudson queried counselors to come up with examples of the types of employees they're helping. One couple were going through a divorce, and the wife told ComPsych counselors that financial stress was the final trigger. They had maxed out their credit cards and were living off credit in hopes that they could keep their house. Another woman called because she suspected her husband was gambling again, apparently hoping to win big so they could repair their financial mess. She was afraid they were going to have to move in with her parents, ComPsych says.

For Gary Sweredoski of Myrtle Beach, S.C., the threat of losing his home to foreclosure has taken both a physical and an emotional toll. In 2007, Sweredoski, who had no health insurance, underwent triple bypass surgery and wound up with more than $300,000 in medical bills. Then Sweredoski, 60, a real estate broker, saw his business suffer as the housing market crashed.

Today, he and his wife, Irene, struggle to make the mortgage payment on the dream home they built in Myrtle Beach and are trying to stave off foreclosure. Like many other homeowners struggling with the financial consequences of the housing slump, Gary says the emotional pain can be severe.

Standing on his deck overlooking a lake where ducks swim and bobbing pontoon boats drift by, he says such circumstances "shatter your pride and become very humiliating, even though the circumstances are not of our making.

"The situation keeps you up at night, preventing you from getting the rest you need. A lot of the depression that I feel, I do in private," he says.

"It angers you. It frustrates you. It has a large bearing on your emotional state. When the thought of losing a home looms, you lose more than a building. You lose what you worked for so many years, all of the equity that you have accumulated over the years. It's humbling. It affects us deeply."

Rising depression, suicide rates

Historically, research shows, rates of depression and suicide tend to climb during times of economic tumult.

Undocumented Workers do no paid taxes.!!!!!! That Sounds familiar to you.






Tax evasion is in progress BUT not from Undocumented workers. Citizen evaded the payment of more than $3 million in taxes and defrauded more than ten lenders, including several federally insured financial institutions and Stewart Title, of more than $6.6 million. The Punishment fit his crime.!!!!!!!!!!!!!!

FORMER WORCESTER ATTORNEY SENTENCED ON FRAUD, TAX VIOLATIONS CHARGES.

BOSTON, MA - A Worcester man was sentenced today in U.S. District Court on wire fraud and evasion of payment of taxes charges.

United States Attorney Michael J. Sullivan, Warren T. Bamford, Special Agent in Charge of the Federal Bureau of Investigation - Boston Field Division and Tyrone G. Barney, Special Agent in Charge of the U.S. Internal Revenue Service, Criminal Investigation - Boston Field Office, announced today that ALAN MASON, age 61, of 26 Pine Hill Road, Princeton, MA, was sentenced by U.S. District Court Judge Dennis Saylor IV, to 9 years of imprisonment, to be followed by 3 years of supervised release. He was also ordered to pay $6,628,119 in restitution. MASON was immediately remanded into custody.

MASON was an attorney whose law practice was centered on providing legal services in connection with real estate closings, and who conducted business in Worcester under the name Alan Mason Legal Services, Inc. MASON was also involved in the purchase and sale of real estate. From at least June 2001 through June 2006, MASON engaged in a fraudulent scheme in which he took funds he received from banks for the purpose of paying off prior liens on properties for closings he was handling, and converted those funds for his own personal and business purposes.

In furtherance of that fraudulent scheme, MASON prepared documents, including checks and HUD-1 forms, which made it appear that he had in fact paid off the prior liens. Instead, MASON made monthly mortgage payments to the prior lienholders in order to prevent the loans from going into default and thus alerting the buyers, sellers and new lenders that the prior lien had not been paid off. As an agent of the title insurance company Stewart Title, MASON issued title insurance policies to real estate buyers and lenders which indemnified them against title defects, even though he knew that the titles were defective because he had not paid off prior lienholders and had not obtained discharges of those liens. MASON’S scheme defrauded more than ten lenders, including several federally insured financial institutions and Stewart Title, of more than $6.6 million.

MASON also evaded the payment of more than $3 million in taxes by, among other things, setting up and controlling multiple real estate trusts and bank accounts using the names of employees and relatives but which did not identify MASON’S interest in writing to prevent the tax authorities from attaching those assets. MASON bought and sold real estate through those trusts and used the substantial profits for personal expenses such as home improvements, an antique clock collection, mortgage payments and investments in new properties.

The case was investigated by the Federal Bureau of Investigation Boston Field Division and the Internal Revenue Service, Criminal Investigation - Boston Field Office. It was prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Sullivan’s Economic Crimes Unit.