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Is Obama about to forgive billions in mortgage principal?
Hot Air ^ | 8/5/10 | Ed Morrissey

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 Obama’s 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. …


TOPICS: Business/Economy; Constitution/Conservatism; Front Page News; Government; News/Current Events
KEYWORDS: bailout; davidgregoryswife; fanniefreddie; fanniemae; freddiemac; frontpage; mortgage; nbccoverup; pitchforks; porkulus
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To: dirtboy

How does this square with the deficit commission?


81 posted on 08/05/2010 7:11:23 AM PDT by CPT Clay (Pick up your weapon and follow me.)
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To: antivenom

but the mule will only go 40 miles on a battery charge


82 posted on 08/05/2010 7:11:36 AM PDT by silverleaf (Those who can make you believe absurdities can make you commit atrocities.)
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To: Daisyjane69

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.


83 posted on 08/05/2010 7:12:35 AM PDT by Diggity
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To: Daisyjane69

Now THAT’S an October Suprise!!!!


84 posted on 08/05/2010 7:13:02 AM PDT by mo
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To: Free America52

I’m sure they’ll attach some requirement...that you be a disadvantaged minority or something!


85 posted on 08/05/2010 7:13:13 AM PDT by mdmathis6 (Mike Mathis is my name,opinions are my own,subject to flaming when deserved!)
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To: SoFloFreeper

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.


86 posted on 08/05/2010 7:13:16 AM PDT by Daisyjane69 (Michael Reagan: "Welcome back, Dad, even if you're wearing a dress and bearing children this time)
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To: SoFloFreeper

Here ya go:

http://blogs.reuters.com/james-pethokoukis/2010/08/05/an-august-surprise-from-obama/


87 posted on 08/05/2010 7:14:15 AM PDT by Daisyjane69 (Michael Reagan: "Welcome back, Dad, even if you're wearing a dress and bearing children this time)
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To: Daisyjane69; sheikdetailfeather

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


88 posted on 08/05/2010 7:14:23 AM PDT by Matchett-PI (BP was founder of Cap & Trade Lobby and is linked to John Podesta, The Apollo Alliance and Obama)
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To: Free America52; All

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.


89 posted on 08/05/2010 7:14:24 AM PDT by SoFloFreeper
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To: MestaMachine

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.


90 posted on 08/05/2010 7:15:34 AM PDT by Ezekiel (The Obama-nation began with the Inauguration of Desolation.)
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To: posterchild
Next will be a bill to compensate me for every stock I ever bought and sold at a loss. Right?

Nope, there's no Union angle. How about car loans? They're all upside down.

91 posted on 08/05/2010 7:16:13 AM PDT by ecomcon
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To: Diggity
Watch for massive inventory to come on line.

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.

92 posted on 08/05/2010 7:18:07 AM PDT by zzeeman (Existence exists.)
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To: Daisyjane69

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.


93 posted on 08/05/2010 7:19:18 AM PDT by mo
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To: Daisyjane69
"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. "

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.

94 posted on 08/05/2010 7:19:37 AM PDT by Dubya-M-DeesWent2SyriaStupid!
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To: silverleaf

bump


95 posted on 08/05/2010 7:20:08 AM PDT by CPT Clay (Pick up your weapon and follow me.)
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To: SoFloFreeper

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.


96 posted on 08/05/2010 7:20:19 AM PDT by Moonman62 (Politicians exist to break windows so they may spend other people's money to fix them.)
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To: zzeeman

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.


97 posted on 08/05/2010 7:20:18 AM PDT by Daisyjane69 (Michael Reagan: "Welcome back, Dad, even if you're wearing a dress and bearing children this time)
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To: Bean Counter

++++ 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


98 posted on 08/05/2010 7:20:52 AM PDT by Varsity Flight
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To: Daisyjane69

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.


99 posted on 08/05/2010 7:20:57 AM PDT by SoFloFreeper
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To: Aria

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.


100 posted on 08/05/2010 7:21:14 AM PDT by longtermmemmory (VOTE! http://www.senate.gov and http://www.house.gov)
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