Posted on 08/05/2010 6:39:02 AM PDT by Daisyjane69
Edited on 08/05/2010 6:53:02 AM PDT by Admin Moderator. [history]
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:
Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington to Wall Street that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth. An estimated 15 million U.S. mortgages one in five are underwater with negative equity of some $800 billion. Recall that on Christmas Eve 2009, the Treasury Department waived a $400 billion limit on financial assistance to Fannie and Freddie, pledging unlimited help. The actual vehicle for the bailout could be the Bush-era Home Affordable Refinance Program, or HARP, a sister program to Obamas loan modification effort. HARP was just extended through June 30, 2011.
The move, if it happens, would be a stunning political and economic bombshell less than 100 days before a midterm election in which Democrats are currently expected to suffer massive, if not historic losses. The key date to watch is August 17 when the Treasury Department holds a much-hyped meeting on the future of Fannie and Freddie.
How does this square with the deficit commission?
but the mule will only go 40 miles on a battery charge
Unintended consequences is that people won’t have to do short sales.
Doesn’t matter what the mortgage is since people can’t pay anyway.
Watch for massive inventory to come on line.
Now THAT’S an October Suprise!!!!
I’m sure they’ll attach some requirement...that you be a disadvantaged minority or something!
If you click on the link, and then click on the link within the original article, it tries to explain. Not well, I might add.
But it involves changing the existing rules for GSE’s.
bttt
Is this old news? See this item from back in March:
Mar 24th 2010
How Bank of America’s principal reduction plan will work
http://www.walletpop.com/blog/2010/03/24/how-bank-of-americas-principal-reduction-plan-will-work/
The above is one of the articles from this google search:
Results 1 - 10 of about 1,130 for obama forcing BOA interest only mortgage principal forgiveness
http://www.google.com/custom?hl=en&safe=active&client=pub-3794288947762788&cof=FORID%3A1%3BGL%3A1%3BLBGC%3A336699%3BLC%3A%230000ff%3BVLC%3A%23663399%3BGFNT%3A%230000ff%3BGIMP%3A%230000ff%3BDIV%3A%23336699%3B&channel=1975384696&q=obama+forcing+BOA+interest+only+mortgage+principal+forgiveness&btnG=Search
A couple thoughts: a lot of us are underwater. I keep payin’ my mortgage, too. I would HATE to see Obama do this....it will essentially put my house under the ownership of the federal government.
I will be OBLIGATED to them (since they “forgave” my debt) to OBEY their every dictate—and trust me, once this happens, they will make it clear: they OWN you.
Also, if you’re in dire straits, then TALK TO YOUR BANKER...or someone. Get the problem fixed in the private sector, don’t wait for the gubmint to bail you out.
God bless.
America, the muslim squatter in the White Hut is none other than the old adversary, the accuser... satan in black and white. There is a reason he hates the very core of your being. You, America, are the daughter of the freewoman, and the children of the bondwoman see that you are weak, and are poised to kill you and hijack your birthright. Man your battle stations. This is not a drill.
Nope, there's no Union angle. How about car loans? They're all upside down.
And we all know what that will do to the price of all of our homes...
This is seriously bad voodoo here (many many "unintended" consequences), if they go through with this we may see things rapidly fall apart. Prepare.
In all probability this has two benefits..while “solving” the Democrats problems this fall...and putting Pubbies in a bind...it also will “pay off” the huge mess of foreclosed houses on the books that the banks can’t declare for fear of insolvency.
This is not news. Obama already tried this. It was under a special government modification program for FHA FM/FM initiated loans only.
It also needs to be discussed the part about "Americans who owe more than what their homes are worth."
These are the original subprimers. They reach gov. red tape and it has been reported they are failing to return all the proper documents/paperwork required.
There are people in dutch with their homes that can't sell their homes and housing values have gone way down.Will this supposed new Obama save all; bail 'them' out?
Obama has tried all of this already. Even allowing those in dutch to PAY RENT but no one returns paperwork. It is all one big cluster.... mess.
Obama and Barney Frank need to own up to them causing all of this with their GIVE EVERYBODY A HOME progressive Peter Pan Clinton democrat ideals and then fix what they screwed up.They know how to fix what they created. They have to fess up first...which will NEVER happen.
RESPONSIBILITY is the key word.
bump
W started the current trend of vote buying that we’re seeing. Most notable were his tax rebates which had no mid or long term effects on the economy.
I’m afraid to think of what they might be. Got any thoughts you would like to share?
They never teach you about this at CFP school.
++++ and in short, it is blatantly unconstitutional to do this, and will lead to nothing good ++++
The core of the breached “moral hazzard” / trust.
More upward price pressure vs. unemployment
bingo. it would be a disaster.
(I did read the Reuters piece. I understood it to say it would HARP as the “vehicle” to forgive the loans, but that is a far cry from saying it was the original intent (there is that phrase liberals hate!) of the law. B.O. would be perverting the program for his own political goals.
You are a sucker if you did not use a government sanctioned mortgage program.
IOW who was loaned the most money with the inflated prices?
This is a wall street bailout still because there is no criminal prosecution for inflating home appraisals.
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