July 17, 2024

Barack Obama
Barack Obama - wikipedia

After the government’s massive stimulus spending plans, the Obama administration is probably disappointed with the continuing and escalating home foreclosures. Yesterday the Obama administration announced that they have conceived a new program that would convert potential foreclosures into rentals. A spokesman said it’s reasonable for policymakers to consider options for loan forbearance — allowing borrowers to delay, defer or skip payments — that are more effective than those currently available in the private sector.

The idea is to turn mortgage defaulters into renters. Such a plan would let borrowers who have fallen behind on their mortgage payments, avoid eviction by renting their homes. They’d give up all their equity (what equity?) and future claims on the equity, in exchange for getting to stay in the home.

How brilliant! I can see the headlines now: Foreclosures Cut 75%  – Obama rescues troubled Homeowners  – Obama Cures Foreclosure Problem.  Perhaps the real benefit of such a program will be the banks.  Banks, now showing these homes as non-paying liability, would be able to show them as a paying asset. Plus, tens of thousands of troubled homeowners would now be assured of voting for Obama’s re-election so they can insure their handout-living continues. Depending on how the plan works, the government would establish a rental Czar and thousands of government jobs in the new government rental management program. A real win-win situation for everyone  . . .  except for the taxpayers.

It was also reported that officials are creating a “housing stipend” added to unemployment benefits of homeowners. The hope is that by paying this additional money to the un-employed, it would lessen the chance for additional foreclosures.  What about additional money for existing renters? This could be considered discrimination against those renters.

In my opinion, what needs to happen, what must happen, is the flushing of bad debts once and for all, massive bank losses, and a return to reasonable living and lending. Handing out ever more exotic loans on ever expanding time horizons is a bad choice, whether or not it will work.

If you try and rig the market to give benefits to people who don’t pay their mortgage… don’t be shocked when less people stop paying their mortgage. When you change the rules in the middle of the game… don’t be shocked that the prudent people get angry.

Another way to look at this plan is it basically makes government REITs. This new deadbeat homeowner rental program could be known as: Shared Homeowners Assistance Management; SHAM for short.

Our government now controls banks and car companies, and will soon control health care and energy/utilities. Then, rents and whatever else they can decide. Your costs will be going up, but your income– should you be lucky enough to have income that is not provided via government check– will not be increasing.  I hope all the people that voted for Obama because Bush was in the pocket of the banks are happy now.  

10 thoughts on “Govt. to Cut Foreclosures by 75%!

  1. If we can bail out the rich (socialism) Then let’s do the stupid as well (socialism),
    or we could practice real capitalism and let them crash and burn.
    It would get rid of the crooks and make opportunity for the new blood to have a go at it.
    To think that Betting your life savings in the stock market was a good Idea?
    Only fools would take a risk like that. (risk is ,the chance to loose it all)
    Betting is for those that can afford to loose the money they bet. So Be It.
    Who wants to talk about the the real issue of national debt and the day
    we really will go belly up. Can’t anybody else see the future of this financial
    disaster and stand up and tell the people the truth. We are Bankrupt.
    We have to much on the credit card and the foreclosure notice is already hear.
    As a country we have taught the stupid to do the same in their own homes. So, the truth is people really only know what they have been taught. Ignorance

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  2. There’s an extremely simple way to avoid foreclosure: make your mortgage payments on time every month. If you are unwilling or unable to do so, then you will lose your house. This is exactly what you agreed to in the mortgage contract that you signed. Expecting the rest of us to “bail you out” is a morally indefensible position.

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  3. To all the prudent homebuyers of the world: those who are not underwater on their loans, those who have no mortgage, and all the renters, DO NOT ACQUIESCE TO THIS WITHOUT PROTEST! Your money is about to be taken to bail out those who foolishly purchased housing using option-ARMS, no-doc loans, ridiculous teaser rates, and what-not. The people making these decisions are your elected representatives. Make sure you send them a message: fire these traitors in the next election.

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  4. Obama’s pending budget has a provision for reducing the homeowner’s interest write-off. Sue, it will START with high income earners, but, just wait until after the 2010 elections. It’s a good bet that cap will start down on it’s way to zero!

    Also, his Cap & Tax bill is the largest tax bill ever! Some tink the required home govt. energy audits have been removed, but not exactly. They put in a provision to start the audits anytime HUD sees fit!

    The reason he tries to rush approval on all bills is if people have the time to really read there 1,000+ page bills, they will find provisions like the home engery audits.

    I think the US went from the frying pan into the fire. Let’s hope the 2010 elections send a strong message!

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  5. Maximum freedom requires maximum responsibility. Remember “Of the people, By the people, For the people”? We have the freedom but need an increase in responsibility so that the knee jerk reactions don’t cause greater problems than they solve. Rushing to solve the health care issue just so we can mark it off our list of things to do is definitely not responsible. We need to let our elected representatives feel the pressure of those who voted them into office to step back and take a close look at what the ramifications of the trillions of dollars spent will do. Not to mention having individual health care decisions being made by regulators, increasing costs to those who opt out even though they have coverage, and forcing medical professionals to provide care they object to. The list goes on.

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  6. If you think that everything government is great, look at US Mail. I read the analysis, and the opinion of the analyst was that private services would be doing it for 10% of what we are paying now. Actually, there are no great examples of government run businesses, none. And capitalism is not a belief system, while socialism is. Why confuse one for the other? I traded socialism when I came here from the Soviet Union in 1991. If you love socialism, why not try it there.

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  7. I think that this one world socialism won’t work here. People are leaving their money off shore because of his plans to spend it for the them. The economy? He just told us last week that it’s fixed. I have a hard time taking him at face value. Feel like the old indian chief talking about “man with forked tongue.”

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  8. Some socialism may be necessary in our new society, but let’s discuss it and not shove it down our throat and want a vote before anything is read. Though I was not a big Clinton supporter, even he did not shove agenda down our throat…..save the wife’s medical socialism experiment. Hopefully, O will control his power ego and start listening to the people first or his career will be toast. In the interim, our economy will drag.

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