Posted on 08/05/2010 9:53:06 AM PDT by Qbert
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. A few key points:
1) Republican leaders believe this is going to happen since GOPers and Democratic moderates in the Senate are unwilling to spend more taxpayer money on more stimulus. But such a housing plan would allow the White House to sidestep congressional objections and show voters it is doing something tangible about an economy that seems to be weakening.
2) Wall Street banks are alerting their clients privately to this possibility. Here is what some are cautiously saying publicly. This from Goldman Sachs:
(Excerpt) Read more at blogs.reuters.com ...
Hmmmm.....since Fannie and Freddie have no funds to actually use to do this, it’s going to add to the deficit, big time.
Doesn’t something like this need to go through Congress?
If this happens, all of us will be paying down mortgages that have nothing directly to do with us - only it will be a tax.
We are so screwed.
“Hmmmm.....since Fannie and Freddie have no funds to actually use to do this, it’s going to add to the deficit, big time.
Doesn’t something like this need to go through Congress?”
Apparently not:
Hmmm.....seems like Freddie and Fannie are part of the budget process, since the gov owns them. Therefore, if they spend say $200 billion on bailouts that amount needs to be incorporated within the budget and approved by Congress.
Something is really screwed up here - seems like Obama is pulling out all the stops to discover ways to eliminate Congress from the process - sort of like a King.
Yeah, it’s a travesty. And to add insult to injury, if you live in a Red State, the Dems want to increase taxes on only you.
After the leaked stealth amnesty memo last week, and now this, I have no doubt that they will pull some stunt to keep power.
This latest blatantly political move is proof that Democrats are born either without a brain or a conscience. Or most likely both.
“Something is really screwed up here - seems like Obama is pulling out all the stops to discover ways to eliminate Congress from the process - sort of like a King.”
It’s exactly like a King. And it’s not only this. Federal agencies are running rampant around Congress implementing new rules that have legal effect that most people are not even aware of. And if the “King” doesn’t like a court’s ruling- like the drilling moratorium ruling- he just disregards it and lets the agencies do the rest. And if he doesn’t feel like enforcing immigration laws- he doesn’t do anything about that either.
And most people have no clue that all this is going on. Conservatives need to be adamant about alerting people about these shenanigans.
>Given that we are truly in a minority-rule tyranny now I was wondering if our next “uprising” would be more like the French Revolution than the American.
The big problem I have with the French Revolution is this: they killed off people for being a part of a *class* not for [the] actual crimes perpetrated by the individual. If we were to have a massive killing of our government officials for their treason I would *not* be against it, but ‘liquidating’ their families and assets would be too much.
>Lady Guillotine speaks louder than words.
Personally the guillotine is a bit to quick for these traitors. If they were duly convected, though not by the current judicial/DOJ system, to death I would want to see them hang. I would want to see them hang by nooses made of the “ropes” of their own intestines and left in public for rats and birds to eat and people to spit upon... that would be a punishment fitting their terrible crimes of treason [through negligence] and sedition [via the promotion of class and/or race warfare].
Most people seem to forget that the first Tea Party involved the destruction of property; specifically that property whose sale would generate [tax] revenue for the government... they were also disguised as “savage Indians” as they did it.
The modern equivalent would be Citizens burning down IRS offices while dressed like “undocumented guest workers.” {so maybe we *should* invest in Mexican flags...}
U.S. President Barack Obama greets workers during his visit to the Ford Motor Company Chicago Assembly Plant August 5, 2010. Obama used the visit to highlight the turnaround in the U.S. motor vehicle manufacturing sector in the past year. REUTERS/Jason Reed
Don’t the savers and investors suffer more loss?
Mortgage-backed Securities
http://useconomy.about.com/od/glossary/g/mortgage_securi.htm
Definition: Mortgage-backed securities are a bundle of mortgages that have been sold by banks to Fannie Mae, who then repackages them and sells them to individual investors. This allows the banks and mortgage companies to sell mortgages off, and take them off their balance sheets. This removes one constraint on banks to make sure the loans are to qualified borrowers.
So our deficit is about to surpass our GDP and we're going to do another bailout? Of course. Must be an election on the horizon.
“along with the thought that people who don’t even own a house should be compensated for their loss.”
Just like black farmers who never farmed got $$$millions from the Dept. of Agriculture!
Obama—one scam after another!
Also: "payor", "donator", "benefactor", "chump", "fool"
Just ‘returning the wealth back to those who created it’ as Obama campaigned on. Everyone shouldn’t be so surprised.
Would the forgiven portion of the mortgage debt be considered taxable income by the IRS?
What about all the people who’ve taken major losses, walked away from mortgages, gone through short sales often paying large deductibles to banks in the process with underwater mortgages since about 1990 which was the first time in the modern era when people lost money on houses?
It’s not just irresponsible people that are under water. I agree with everyone who is aggravated at all the bailouts, but I’m underwater because I bought in August ‘05, near the height of the market when I moved from MD to FL. I had over $200,000 down, have never missed a payment or been late, but I couldn’t sell my house without owing money at settlement. I also can’t refinance unless I plop another chunk of money on the house. There is currently only help for those that have missed payments. I would just like to refinance at a lower interest rate. I started paying extra every month to at least save on interest costs.
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