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 ...
SO help me out here, please:
1) Someone just recently finished buying a $240,000 home in time to qualify for the $8000 obama homebuyers credit.
2) With 20% down, the loan amount is $200K. It is NOT a Fannie/Freddie loan so doesn’t get paid off by the feds.
What happens to this new homebuyer under these circumstances?
What happens to home values in general?
Would the feds have to pay off everybody equally or just Fred/Fan mortgages?
Sharky, why didn’t you tell me Dear Comrade Leader was going to forgive my debt.... I should have bought one of your houses! And an Ava too! And then not been worried about my outsourced job! :0)
Fannie and Freddie will go into crisis mode again, and Zero will roll out another stimulus package, with a few hundred bill to save F & F.... about on Oct. 26th or so.
Had a neighbor down the street who did that a few years back. They bought a $40,000 vehicle then let the house go into foreclosure 6 months later. Very scummy. They bragged to a neighbor about the fact that they would just buy another house in a couple years after the foreclosure was off their record. They also kept coming back after they moved out of the area to use the HOA pool. Some people are just lowlifes beyond conscience. These are the kind of people Obama is targeting for loyalty to him.
Just the opposite—this move would zero out the bad loans on banks’ books, releasing funds held in reserve. Easy money for everyone = hyperinflated equities = Dow 100,000.
SURPRISE?
Is he returning to which he came from?
Planet OBOZO?
No, instead of saying FUBO, we will just say FUB.....as in Beezlebub.
There might as well be an August surprise, it’s just one disaster after another with this guy.
Last year my ex wife decided that her vows meant nothing and wanted a divorce. So we sold our house in the middle of the worst housing market of our lifetimes. One good decision after another. We made virtually nothing on a house we lived in for ten years. So, Fannie and Freddie, even though I don’t own that house anymore, I wants my money! I’m kidding, but just wait, we are going to hear stories just like this, along with the thought that people who don’t even own a house should be compensated for their loss.
That means thet the Treasury Dept will be in effect assuming a huge debt and also giving the security of the mortgages to the owners?
I hope Obama does it. It will not help him one bit.It will turn Ameica completely away from the Welfare Society Obama wants.
If Obama nullified apital Gains for 5 years, then THAT might help him with votes, but that is ideological unacceptable, and the Dems will GO DOWN to defeat.
It took a long while for America to awaken to Obama, 18 months, it will take longer than 3 months for him to come back, if ever.
Obama is toast. So is his shadow fascist government. Even the Black Caucus has turned against him.
ummmm, good luck with that
And Fannie and Freddie now belong to the U.S. "government," not to the Executive Branch of the U.S. government, so that will definitely backfire on Democrats in November's congressional elections... which is possibly OK for Obama (Clinton scenario).
That could also be a trial balloon leak, to measure how this action would go over with people. My suspicion is, not well.
Mmmmmmm...pie!
“Home” ownerhsip in this country is a zero sum game.
I still remember reports of a North Carolina woman asserting that “It’s like Christmas!” after the passage of IdiotCare.....if that was Christmas, I wonder what she would call this major redistribution of wealth stealth move by the AnnointedIdiot...../s =.=
You forget, we are living in bizarro world now.
buying votes with taxpayers money super size
Exactly.
This will piss off alot of non Freddie Fannie borrowers.
That is alot of people.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.