Posted on 08/05/2010 1:18:03 PM PDT by blam
Treasury Denies Talk Of Massive Homeowner Bailout
Joe Weisenthal
Aug. 5, 2010, 12:50 PM
Image: AP
Alright, well for now The Treasury (via CNBC) is denying this morning's talk that Fannie and Freddie are planning to engage in a massive mortgage forgiveness scheme as a way of bailing out the homeowner.
That's fine, though we're still not convinced that the Treasury isn't trying to figure out ways right now to further use the GSEs to goose the housing market.
Remember, they were given a total blank check last year, add it's clearly the desire of the Treasury and the Fed to stimulate housing further, get homeowners out from underwater, figure out a bailout scheme, get cash into homeowners pockets, and do something that's better than HAMP.
So maybe the mega "August Surprise" isn't about to happen, but keep paying attention to whatever levers the GSEs might pull.
(Excerpt) Read more at businessinsider.com ...
I believe that they are going to do it.
Maybe in October???
Joe Weisenthal
Aug. 5, 2010, 12:27 PM
Let's talk a little bit more about how a mortgage principal forgiveness plan by Fannie and Freddie would play out.
Yes, underwater homeowners would be bailed out (perhaps).
But it's also a great for the banks.
Here's why.
Everyone agrees that the only serious way to keep people in their homes is through cramdowns. The problem with that is that this instantly demolishes the mark-to-myth assets that banks hold on their balance sheets. There's literally no way you can keep up the lie once the the principal on a mortgage has been written down.
So rather than push through a scheme like this, and make the banks take the hit, the GSEs (and by extension the Treasury, and by extension The Federal Reserve) takes the hit, leaving bank balance sheets intact.
sounds like a trial balloon... made of lead.
bttt
B.O. plans to order Freddie and Fannie to forgive mortgage principal? He already ordered Bank of America to do just that a long time ago. They just began implementing it last Monday according to my sources:
http://www.freerepublic.com/focus/news/2565063/posts?page=88#88
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James Pethokoukis hears rumors of an August surprise coming from the White House, one that will attempt to win backs the hearts and minds of voters dismayed at the failing economic policies of the Obama administration. With the government fully in control of Fannie Mae and Freddie Mac, Barack Obama may issue an order to forgive portions of underwater mortgages processed through the GSEs, where negative equity approaches $800 billion overall. Some financial houses have begun quietly preparing for the possibility:
More: http://hotair.com/archives/2010/08/05/is-obama-about-to-forgive-billions-in-mortgage-principal/
Oh look, a government hack’s mouth is moving.
Looks like he’s lying.
Now *that's* change.
If they deny it believe it’s true.
If he did this, it would make people madder than ever. Even at this late date, the number of people who pay their bills and honor their obligations is still greater than those who don’t.
That was fast....My guess, their lying, otherwise, they would have waited weeks to actually respond.
Message to Geithner - YOU LIE
I am hacked off. I paid cash for my house and it is worth less than I bought. And what about those people who have loans but not Fannie Mae or Freddie Mac loans who are also underwater.
This Administration is ruining this country.
You nailed it perfectly.
If they deny it believe it’s true.
They just denied it.
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