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.
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