Posted on 08/05/2010 8:17:27 PM PDT by The Magical Mischief Tour
The rumors are continuing to grow louder that the Obama administration is planning to announce a massive stimulus via the housing market later this month. Earlier this week, the word was that the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac might subsidize mortgage refinancing at below-market interest rates. But today, a possibility is being talked about where the GSEs instead (or maybe also) forgive the principal on the underwater mortgages they own or guarantee. James Pethokoukis of Reuters suggests that this could amount to as much as $800 billion. This would be such a huge move that it's hard to wrap your head around it.
First, this could really happen. The Treasury has unlimited discretion to plow as much money as it pleases into Fannie and Freddie. So adding several hundred billion dollars to the $150 billion already provided through their bailout would be as easy as the stroke of a pen. Moreover, the government's other foreclosure efforts, particularly the HAMP program, have had lackluster success. This would provide the principal reductions that many progressives have been calling for to make for more effective modifications -- but even for those who aren't in danger of foreclosure.
Consequently, it would act as a stimulus. Let's say your mortgage was based on original principal of $250,000. At 6% fixed interest, that would make your payment around $1500. But let's say the housing bubble dropped your property value by 30%, so the home is only worth $175,000. Now, let's say that you had paid off $25,000. That leaves $50,000 in principal that the GSEs could potentially write down. Suddenly, your payment would drop to as low as $1,050. What would you do with that extra $450 per month? The Obama administration would hope that you spend it!
(Excerpt) Read more at theatlantic.com ...
I just can’t figure Obambi out, is he just plain crazy or evil???
Hey, let’s go for the whole enchilada! Have the government pay off everybody’s mortgage. Free beer and sausages for everyone!
Up is down and down is up. Be responsible, pay your debts and you to can be made out to be a fool.
Hair of the Dog?
...as Fannie is looking for another 1.5 Billion bailout.
Hurry Obama and the Dems!!! Gotta REDISTRIBUTE THE WEALTH before the people rebel in November!!!! That “Joe the Plumber” incident was a HUGE clue as to what Obama was/is all about.
Free beer and sausages for everyone!
++++++++++++++++++++++++++++++
Ja!!! Ja!!! Mein Führer vill make ze trains run on time wit food on da table.
HAPPY DAYS ARE HERE AGAIN!!!!!
“I just can’t figure Obambi out, is he just plain crazy or evil???”
BOTH!
At least the Trains run on Time.
Pray for America
this was being reported on CNBC when i left the office today...
Lease Problems on Cash for Clunkers Cars After One Year http://www.freerepublic.com/focus/f-news/2565560/posts
Is this really that difficult to understand?
The mortgages to be paid off will be overwhelming held by blacks.
The money the government pays the banks with will come from taxes...
The vast majority of which will come from wealthy (no longer just ‘the rich’) white people.
QED
btw- this is the straw that will start the civil war/class warfare in this nation...
those of us without Fannie/Freddie mortgages won’t pay our taxes...
Not everyone who own their home outright is “upper class”.
There are many people who scrimped and saved up a larger downpayment, bought less home than they ‘qualified for’ (in realtorspeak) and who then proceeded to pay of their mortgage as quickly as possible.
These people would become overnight the biggest shmucks on the planet ... and I’ll bet mighty angry schmucks.
Government is doing everything possible to keep the wheels from coming off the push cart (banking system). Stimulating via Quantitative Easing is just creating more debt and still the economy is not going anywhere because consumers are hunkering down which means they refuse to spend or ask for new loans. This is killing banking as they rely on creating new debt (consumer loans) to service (pay down) existing debt.
Whether consumer are preparing for new taxes or are debt ridden or trying to save or looking for a job is leaving the economy in limbo. All these great socialist ideas out of Congress don’t seem to be helping matters. Just throwing money at the problems may not even help with getting reelected.
http://en.wikipedia.org/wiki/Quantitative_easing
Ok, now when are Dodd and Frank going to jail?
Jobs are the #1 issue among the majority of Americans....how exactly is this creating jobs? =.=
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