If they do this, they deserve to be swept out of office

[AZGrizFan]

We need to get in so deep to the Chinese that they can't let us go, I say borrow the money.

What makes you think we aren't there already? We go down, everyone goes down. It's like a financial deterrent.

The global economy is just one big ponzi scheme, eh?

[TheDancinMonarch]

Good for him. Doing GODS work. Not in bed with big oil or Wall Street.

So you think that if you agree to buy a house for $100,000, borrow $80,000, the home value drops to $70,000 that you are entitled to a personal bailout? Maybe if your house appreciates you should write the bank a check for the positive equity you get, huh? Crazy leftists......

If they do this, they will be back for their share of the positive equity later. The precedent will have been set.

[HI54UNI]

An August Surprise from Obama?

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:

http://blogs.reuters.com/james-pethokou ... rom-obama/" onclick="window.open(this.href);return false;

Read about this earlier today.

This will start the revolution.

[houndawg]

An August Surprise from Obama?

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:

http://blogs.reuters.com/james-pethokou ... rom-obama/" onclick="window.open(this.href);return false;

Read about this earlier today.

This will start the revolution.

I think you're underestimating just how little people give a f*ck about government anymore.

[ATrain]

I bought my home for less than what it is worth and paying off an extra $125/month.

This bill is complete bullshit. While it would be nice to have a bailout if my home dropped below the buying price, truthfully I wouldn't DESERVE one (but I'd take it, and still give my vote to the guy against Obama. I will always accept presents-a lesson I learned as a 2-or-3 year old child at Christmas, but my loyalty can't be bought). Making an investment and buying a home is a risk, just like going into the stock market, etc...rise and fall on your own merits.

[kalm]

If the original problem with housing was that too many people who couldn't really afford homes were getting loans anyway, this fixes nothing.

A decent paying job is far more important than owning a home.

Whether it's public works projects or private sector incentives, all stimulus should be towards job growth.

[houndawg]

I bought my home for less than what it is worth and paying off an extra $125/month.

This bill is complete bullshit. While it would be nice to have a bailout if my home dropped below the buying price, truthfully I wouldn't DESERVE one (but I'd take it, and still give my vote to the guy against Obama. I will always accept presents-a lesson I learned as a 2-or-3 year old child at Christmas, but my loyalty can't be bought). Making an investment and buying a home is a risk, just like going into the stock market, etc...rise and fall on your own merits.

I just don't get the hysteria with these people. So what if your home is worth less than you paid. Keep paying and WAIT.

[01lugrad]

Honestly, I'm not surprised with anything this idiot does anymore.

[OL FU]

A back-door stimulus via Fannie and Freddie probably would have all Republicans and most independents camped out for a week to vote on November 2. Reason enough for the Obama Administration to assure the world that like August's thunderstorms, the "free stimulus" rumor was merely passing through.

http://online.wsj.com/article/SB1000142 ... rialPage_t" onclick="window.open(this.href);return false;


The WSJ opinion and I agree. This move would be politically disasterous.

The Treasury Department yesterday tossed cold water on the story. "The Administration is not considering a change in policy in this area," a spokesman said.

We hope that stays true. People make jokes about the U.S. turning into Argentinaville, and a gambit like this would push us close.

[From the class of 09]

http://articles.moneycentral.msn.com/In ... t-die.aspx" onclick="window.open(this.href);return false;

This is the only solution to dealing with Fannie and Freddie

[CitadelGrad]

That's the first sensible thing Jim Jubak has ever written.

[AZGrizFan]

I bought my home for less than what it is worth and paying off an extra $125/month.

This bill is complete bullshit. While it would be nice to have a bailout if my home dropped below the buying price, truthfully I wouldn't DESERVE one (but I'd take it, and still give my vote to the guy against Obama. I will always accept presents-a lesson I learned as a 2-or-3 year old child at Christmas, but my loyalty can't be bought). Making an investment and buying a home is a risk, just like going into the stock market, etc...rise and fall on your own merits.

I just don't get the hysteria with these people. So what if your home is worth less than you paid. Keep paying and WAIT.

to both of you.

[native]

Good for him. Doing GODS work. Not in bed with big oil or Wall Street.

So you think that if you agree to buy a house for $100,000, borrow $80,000, the home value drops to $70,000 that you are entitled to a personal bailout? Maybe if your house appreciates you should write the bank a check for the positive equity you get, huh? Crazy leftists......

Of course that's what he wants: something for nothing. It's the entire Obama agenda for half of his constituency.

[89Hen]

http://articles.moneycentral.msn.com/In ... t-die.aspx

This is the only solution to dealing with Fannie and Freddie

Fannie and Freddie were only part of the problem. They didn't venture into Subprime, Neg Am, Option ARM's... IMO THOSE were the killers. Get rid of Fannie and Freddie and there's no money to lend to your average, well qualified borrowers.

[dbackjon]

http://articles.moneycentral.msn.com/In ... t-die.aspx

This is the only solution to dealing with Fannie and Freddie

Fannie and Freddie were only part of the problem. They didn't venture into Subprime, Neg Am, Option ARM's... IMO THOSE were the killers. Get rid of Fannie and Freddie and there's no money to lend to your average, well qualified borrowers.

But that is not what Fox and Friends would have you believe. It is all Fannie/Freddie's fault

[GannonFan]

Fannie and Freddie were only part of the problem. They didn't venture into Subprime, Neg Am, Option ARM's... IMO THOSE were the killers. Get rid of Fannie and Freddie and there's no money to lend to your average, well qualified borrowers.

But that is not what Fox and Friends would have you believe. It is all Fannie/Freddie's fault

Of course, the other side says that Fanny and Freddie had absolutely nothing to do with the problem and that Wall Street alone was to blame. Of course, like most things, the true answer is somewhere in the middle.

[OL FU]

I may be wrong but I do think Fannie and Freddie acquired alot to the mortgage back securities so without them the market never would have been much smaller. Some can can fact check that one I may be wrong. They did however take significant risks for two reasons. One the gubment wanted them too and two they had the "implied guaranty" of the federal gubment. They may not have acquired or placed sub prime but they certainly placed close to zero equity loans which was as complicit in the real estate fall as sub prime. In fact, one could argue that zero down loans were a larger problem than sub prime since they were a much larger part of the market.

Regardless, any one that doesn't think Fannie contributed significantly to the problem should simply take a look at the losses they have incurred over the last three years.

with that said, 89 is right. What do you do now. Without Fannie and Freddie, there ain't no new mortgages.

[OL FU]

Earlier article confirming the CMBS involvement.

Fannie Mae last year provided $19.8 billion of financing for apartment properties, down from $35.5 billion a year earlier.

But instead of relying on its balance sheet, the housing-finance agency turned largely to the securitization market, funding $16 billion, or 81 percent of its originations through its mortgage-backed securities program. That compares with 2008, when only 17 percent

Actually there was nothing wrong with securitizing mortgages that were underwritten properly. In fact they were a very useful tool in spreading manageble risk and adding liquidity to the mortgage market. But a combination of risky underwriting and rating agency screw-ups blew it all up.

[AZGrizFan]

Fannie and Freddie were only part of the problem. They didn't venture into Subprime, Neg Am, Option ARM's... IMO THOSE were the killers. Get rid of Fannie and Freddie and there's no money to lend to your average, well qualified borrowers.

But that is not what Fox and Friends would have you believe. It is all Fannie/Freddie's fault

Really? Do you watch Fox News? Or are you just reciting dailykos talking points?

[89Hen]

They may not have acquired or placed sub prime but they certainly placed close to zero equity loans which was as complicit in the real estate fall as sub prime. In fact, one could argue that zero down loans were a larger problem than sub prime since they were a much larger part of the market.

They were trying to keep up with FHA that offered 3% down loans and VA that have always had 0 down loans. That's where FNMA and FHLMC started. They did 97% community homebuyer loans, then expanded to 100% and even 103% loans (107 for a very brief time). Whether you put 3% or nothing down, you're upside down until your property value increases. FHA still does 3.5% down all the way up to $750,000 in my area. VA will still do 0 down up to $800,000.

[OL FU]

They may not have acquired or placed sub prime but they certainly placed close to zero equity loans which was as complicit in the real estate fall as sub prime. In fact, one could argue that zero down loans were a larger problem than sub prime since they were a much larger part of the market.

They were trying to keep up with FHA that offered 3% down loans and VA that have always had 0 down loans. That's where FNMA and FHLMC started. They did 97% community homebuyer loans, then expanded to 100% and even 103% loans (107 for a very brief time). Whether you put 3% or nothing down, you're upside down until your property value increases. FHA still does 3.5% down all the way up to $750,000 in my area. VA will still do 0 down up to $800,000.

That is an interesting take I really hadn't heard before. First let me restate my premise, that low down payment loans were a bigger culprit in the undoing of the housing market than subprime. Government insured FHA loans forced the competition into a riskier business model.

Not saying that is the case but you tell me.

[mebison]

Also complicit is a culture where everyone thinks owning a house is such a slam-dunk outstanding investment and you hear that you are an idiot if you are "throwing your money away on rent". Pet peeve of mine, both when I rented and now as a homeowner.

[AZGrizFan]

Earlier article confirming the CMBS involvement.

Fannie Mae last year provided $19.8 billion of financing for apartment properties, down from $35.5 billion a year earlier.

But instead of relying on its balance sheet, the housing-finance agency turned largely to the securitization market, funding $16 billion, or 81 percent of its originations through its mortgage-backed securities program. That compares with 2008, when only 17 percent

Actually there was nothing wrong with securitizing mortgages that were underwritten properly. In fact they were a very useful tool in spreading manageble risk and adding liquidity to the mortgage market. But a combination of risky underwriting and rating agency screw-ups blew it all up.

Add into that combination many, many hundreds of thousands of loans that WERE underwritten properly, then securitized, then defaulted on when the value of the home didn't hold up.

People paid on home loans only inasmuch as they were able to use their home as their own private ATM. Once the music stopped on THAT little charade, all bets were off.

[houndawg]

Also complicit is a culture where everyone thinks owning a house is such a slam-dunk outstanding investment and you hear that you are an idiot if you are "throwing your money away on rent". Pet peeve of mine, both when I rented and now as a homeowner.

Call me a fiscal conservative but we bought our place to live on and raise kids on, not to use as an ATM.

[ASUG8]

Also complicit is a culture where everyone thinks owning a house is such a slam-dunk outstanding investment and you hear that you are an idiot if you are "throwing your money away on rent". Pet peeve of mine, both when I rented and now as a homeowner.

Call me a fiscal conservative but we bought our place to live on and raise kids on, not to use as an ATM.

I think you may be a minority.....too many people saw the equity gains as the market improved not as a safety net but as a license to spend. The market crashed and instead of owing 85% on market value you're underwater at 120%+.