Skip to comments.Is Obama about to forgive billions in mortgage principal?
Posted on 08/05/2010 6:39:02 AM PDT by Daisyjane69Edited 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 Obamas 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.
And this is EXACTLY why Fannie and Freddie were not included in the recent Financial ‘Reform’ legislation.
COOL!!!!! Now I can pay for other people’s houses as well. I hate commies!
Gee, I feel like a fool for paying off my mortgage - is it too late to go buy a house I can’t afford and should not be approved for?
You mean making payments month after month, year after year, just means that I’ve been a sucker?????
This is going into place in NC and SC, two states that wobbled purple in the last election and which are currently becoming deep red. There’s a ton of unemployment around here and this would be a cunning payoff to keep a number of heritage Democrats on the plantation, especially older white men who otherwise would vote anti-Democrat (not pro-Republican).
So I should probably stop sending in my mortgage now.
I’m sure illegals will be included!
Seems being a responsible citizen is for suckers like me!
This would almost certainly be where we shift from deflation to inflation. They will have to borrow the money from the fed. If this happens, it will be the beginning of the coming hyperinflation.
The people are pissed at the spending so Obama’s answer is....spend more. Talk about tone deaf.
Great idea! Now we can go under with the entire country, secure in our own homes!! /sarc
Who hatched this current crop of buffoons, anyway?
After that he might as well declare himself President for life and become dictator. If he does this and makes an Executive Order for amnesty for illegals we are there.
Social justice....up close and personal
This vote buying nonsense started with the previous administration.
The people making their payments every month already hate his guts so using their tax dollars to make them feel like fools isn’t going to lose him any votes.
Yes, he would have to pay off all mortgages and commercial loans. As no one would ever make another payment. Not many banks would be left standing. Inflation would be at least 20% per year. The people that would loose would be those with no debt and large savings.
Next will be a bill to compensate me for every stock I ever bought and sold at a loss. Right?
Rewarding failure & financial irresponsibility. Way to go, Mr. President. It’s stuff like this that keeps the economy bumping along the bottom rather than recovering.
Boy, I feel foolish for paying off my mortgage now!
I pay my bills
Where My cheese????
Then next thing you know, he will declare our Official Language is Swedish.
I have mixed emotions about this, as I am one of those people who are upside down on my mortgage. Not because I’m a slacker or anything like that.
I bought my property at or near the peak and have since lost my job as VP Sales of a small software company that has gone out of business. I’m still making my mortgage payment out of my savings account, have never missed a payment and don’t plan on missing a payment even if I have to cash in 401k plans, IRA’s, etc.
I have never taken government assistance on anything. But the idea of getting back above water on my mortgage is very attractive. And no ... it would not change my hatred of Obama and I will not vote for him. But I know for me, it would have a huge impact on my current financial situation.
It’s Not Cho Cheese Man!!!
Ok...but still...why should I have to pay...for your choices.
Next he’s going to propose we change the country’s name to Zimbabwe West.
Exactly right... and as I recall they also shielded Fred and Fanny from congressional inquiry, making what they're trying to do easier to get away with.
huge impact on my current financial situation.
Temporarily. Long term you would end up living in a tent in Obamaville.
Being underwater mostly doesn’t come from being a deadbeat, contrary to the posters who are implying that. Mostly it comes from living in a Blue state, buying overpriced property during the bubble or refinancing during the bubble, then watching the value get cut in half or in third. It is still irresponsible behavior and should not be bailed out.
My one question is: On one hand we have trillions of dollars of debt but only so many assets. The debt keeps growing but the assets do not. There MUST be a breaking point somewhere, sometime.The Feds are making $’s out of nothing. The buck has to stop
“Ok...but still...why should I have to pay...for your choices. “
You shouldn’t, that’s where my mixed emotions come in. I am a true conservative and feel the same way you do.
Seems being a responsible citizen is for suckers like me!
I hear ya, loud and clear.
I read this as only forgiving the underwater portion of the mortgages, which is BS. We live in a nation where people are never held responsible for their actions.
We have been good and not spent like drunk sailors, saved for the girls college educations , our retirement and no credit card debt. Yet our neighbors rack up 60k in credit cards, to have half of it erased, took out second mortgages to put in pools and take vacations. I have to admit, I am a bit green with envy, we want a pool and sunroom so we can enjoy the summers by our pool. But no, we have to watch folks who break the rules get the rewards.
anyone who takes a free cheese mortgage buydown- is rendered powerless to protest govt overspending
clever, eh? The more people you make part of the problem, the less people you have who can resist or protest the problem
...that’s exactly what i was thinking....
Also, who get’s the ‘title’ of the forgiven mortgage? I’m betting OhBummer wants title to every residence and every pice of property privatly owned
Your are diligent and responsible contrary to my blanket assertion above.
Thanks, that was cool.
I don’t know how to do “colors” on a post!
If the obamites get the middle class like you by the wallet, your bodies and minds will follow
that would be the goal of this program
Same reason to require EVERY “government approved” insurance policy to spend at least $1 on abortion.
I would be surprised if he goes this far. This is way beyond the usual demagoguery.
This will go well with 99 weeks of unemployment checks.
Are you utterly unaware of American history?
I’m confused....is this for ALL mortgages or certain mortgages processed by certain companies?
Let’s keep in mind that many of these people are underwater because they treated their homes like piggy banks, and mortgaged it to the hilt in order to pay for family trips to Disneyland, jet skis, boats, breast implants, high tech stereos and everything else you can name.
Their homes are underwater because they likely didn’t bother with upgrading their windows and doors, insulation, heating and air conditioning systems, hot water tanks, and other infrastructure. The house itself is probably not up to current code, and probably needs significant and very expensive repairs before it could ever be worth anything near what is mortgaged against it.
This is exactly what I feared we would get to when the sub-prime crisis first hit: cash grants to individuals directly out of the Federal coffers to bail them out from their own financial irresponsibility. I asked then how this could occur under the US Constitution, and in short, it is blatantly unconstitutional to do this, and will lead to nothing good.
I hear lots of excited chatter about what may happen in the November elections, but the dangerous truth is that there is plenty that a vindictive and defeated Democrat Party can and will do to all of us out here in fly-over country.