Skip to comments.Plouffe’s “Philadelphia” Explanation of Loan Modifications and Their Benefit (Ignore Costs/Risks)
Posted on 05/11/2012 2:48:28 PM PDT by whitedog57
President Obamas Senior Advisor, David Plouffe, sent out an email today explaining why loan modifications are good and not modifying loans is bad.
I felt like Denzel Washington from Philadelphia saying All right, Mr. Laird Plouffe, explain this to me like Im a four-year-old, okay?
Well, here is Plouffes Philadelphia explanation to Americans. Prepare to be insulted.
That presentation by President Obamas housing adviser was Here you go, dimwits, let poppa tell you what to do. And grossly misleading. How about talking to us like we are adults?
Their motto should be Cry Havoc! And let slip the dogs of (class) war!
Let us be perfectly clear. These loan modification programs represent a wealth transfer from investors, banks, Fannie Mae and Freddie Mac to borrowers. And the biggest loser could be the American taxpayer.
Let me put on my Philadelphia hat and talk to you like you are four years old.
If you have a 6.5% rate mortgage and you get a refi that lowers your rate to 4.0%, you win. But someone pays for that gift investors in mortgages such as pension funds, banks and Fannie Mae and Freddie Mac. Nothing is free.
I am not opposed per se to mortgage refis as a matter of fiscal policy (the Boyce, Hubbard and Mayer proposal). I just think that it will be too big of a shock to predict the outcome (just like the National Homeownership Strategy coupled with setting capital gains tax rates on housing equal to zero was too much of a policy shock to predict and we had BAD unintended consequences.
Unfortunately, Plouffee and Obamas housing adviser left out that part of the story. 1) SOMEBODY pays for it and 2) it is a RISKY strategy since we dont know how it will play out.
(Excerpt) Read more at confoundedinterest.wordpress.com ...
See the stupid, demeaning video of Obama’s housing adviser at the link. So misleading it is unbelievable.
“Free money for everyone!”
And what about fairness for those who are paying their mortgages?
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