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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;

If this goes through, Obama will get a guaranteed 1 in 5 vote in '12 - the other 4/5, notsomuch.

Obama is probably one of the greatest presidents the USA has ever had. He is turning this once struggling nation around each and every day he is in office.

So those of us "under water" but are making our payments and don't have a Fannie or Freddie mortgage are screwed again...

Figures...

Col Hogan wrote:So those of us "under water" but are making our payments and don't have a Fannie or Freddie mortgage are screwed again...

Figures...

You're one of the 4/5 I mentioned.....if you weren't already in that group.

Col Hogan wrote:So those of us "under water" but are making our payments and don't have a Fannie or Freddie mortgage are screwed again...

Figures...

There in lies ONE of the problems with this - only rewards CERTAIN people


And just because you are underwater, doesn't mean you are in financial difficulty - pay off the damn loan you took out.

So you won't be able to move for a few years.

Are ALL 15 million of those mortgages underwater controlled by Freddie & Fannie?

Forgetting the wrongs of it which are obvious, in what way to they think this will provide financial stimulus? I assume forgiving 50% of someone's debt would then allow for a lower mortgage payment which would give them more disposable income but certainly not enough to really do any good. I suppose they think the house could be sold easier but I don't see how this impacts pricing or has that much of a positive impact.

Someone explain what the reasoning is other than a weak attempt at a $400B stimulus which is unfairly distributed and probably not going to supply any positive push on the economy.

dbackjon wrote: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;

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

mrklean wrote:

dbackjon wrote: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;

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......

mrklean wrote:

dbackjon wrote: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;

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

apparently kleenex is in the 1/5.

OL FU wrote:Forgetting the wrongs of it which are obvious, in what way to they think this will provide financial stimulus? I assume forgiving 50% of someone's debt would then allow for a lower mortgage payment which would give them more disposable income but certainly not enough to really do any good. I suppose they think the house could be sold easier but I don't see how this impacts pricing or has that much of a positive impact.

Someone explain what the reasoning is other than a weak attempt at a $400B stimulus which is unfairly distributed and probably not going to supply any positive push on the economy.

The only positive short term effect I can see is to somewhat help the housing market. Realtors I have talked to say, at least in Phoenix, there are a lot of people that want to buy homes, but can't because they can't sell the house they currently own, because they are upside down on it. Lower the debt would allow for the sale of these homes, which allows more home sales, etc.

Then typically, there is a boost of spending when you buy a new house.

dbackjon wrote:

Col Hogan wrote:So those of us "under water" but are making our payments and don't have a Fannie or Freddie mortgage are screwed again...

Figures...

There in lies ONE of the problems with this - only rewards CERTAIN people


And just because you are underwater, doesn't mean you are in financial difficulty - pay off the damn loan you took out.

So you won't be able to move for a few years.

Trust me...I DON'T WANT THEIR HELP...

And I don't see it as a reward...unless its a reward for buying at the wrong time, making a mistake (which I did)...

We pay off $500 - $1000 extra a month (when possible) to try and get our heads above water sooner...

ASUG8 wrote:

mrklean wrote:
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......

I wouldn't pin that mentality on just the lefties - the corporate world has been getting this deal for awhile...

dbackjon wrote:

OL FU wrote:Forgetting the wrongs of it which are obvious, in what way to they think this will provide financial stimulus? I assume forgiving 50% of someone's debt would then allow for a lower mortgage payment which would give them more disposable income but certainly not enough to really do any good. I suppose they think the house could be sold easier but I don't see how this impacts pricing or has that much of a positive impact.

Someone explain what the reasoning is other than a weak attempt at a $400B stimulus which is unfairly distributed and probably not going to supply any positive push on the economy.

The only positive short term effect I can see is to somewhat help the housing market. Realtors I have talked to say, at least in Phoenix, there are a lot of people that want to buy homes, but can't because they can't sell the house they currently own, because they are upside down on it. Lower the debt would allow for the sale of these homes, which allows more home sales, etc.

Then typically, there is a boost of spending when you buy a new house.

It works out great for the one guy on your cul-de-sac that sells his home......

dbackjon wrote:

OL FU wrote:Forgetting the wrongs of it which are obvious, in what way to they think this will provide financial stimulus? I assume forgiving 50% of someone's debt would then allow for a lower mortgage payment which would give them more disposable income but certainly not enough to really do any good. I suppose they think the house could be sold easier but I don't see how this impacts pricing or has that much of a positive impact.

Someone explain what the reasoning is other than a weak attempt at a $400B stimulus which is unfairly distributed and probably not going to supply any positive push on the economy.

The only positive short term effect I can see is to somewhat help the housing market. Realtors I have talked to say, at least in Phoenix, there are a lot of people that want to buy homes, but can't because they can't sell the house they currently own, because they are upside down on it. Lower the debt would allow for the sale of these homes, which allows more home sales, etc.

Then typically, there is a boost of spending when you buy a new house.

I can see that but you know it is an interesting conundrum. Fannie forgives your debt, you sell your house and then but a new one financed by Fannie.

OL FU wrote:

dbackjon wrote:
The only positive short term effect I can see is to somewhat help the housing market. Realtors I have talked to say, at least in Phoenix, there are a lot of people that want to buy homes, but can't because they can't sell the house they currently own, because they are upside down on it. Lower the debt would allow for the sale of these homes, which allows more home sales, etc.

Then typically, there is a boost of spending when you buy a new house.

I can see that but you know it is an interesting conundrum. Fannie forgives your debt, you sell your house and then but a new one financed by Fannie.

You'd be dumb not to DEMAND Freddie or Fannie financing given this precedent.

Col Hogan wrote:

dbackjon wrote:
There in lies ONE of the problems with this - only rewards CERTAIN people


And just because you are underwater, doesn't mean you are in financial difficulty - pay off the damn loan you took out.

So you won't be able to move for a few years.

Trust me...I DON'T WANT THEIR HELP...

And I don't see it as a reward...unless its a reward for buying at the wrong time, making a mistake (which I did)...

We pay off $500 - $1000 extra a month (when possible) to try and get our heads above water sooner...

That's how you do it. We're doing similar even though we don't know (or care) if we're upside down or not.

Honestly, I will believe this one when I see it. Whether they will admit it or not, one of their problems is not simply that the economy isn't getting better with the stimulus bill, it is that they are out there touting the success of the stimulus bill while the country reacts with a big WTF. The last thing they need is a program like this which will benefit FANNIE creditors only, then the program not significantly help the housing industry while the the country has another reason to say WTF.

OL FU wrote:Honestly, I will believe this one when I see it. Whether they will admit it or not, one of their problems is not simply that the economy isn't getting better with the stimulus bill, it is that they are out there touting the success of the stimulus bill while the country reacts with a big WTF. The last thing they need is a program like this which will benefit FANNIE creditors only, then the program not significantly help the housing industry while the the country has another reason to say WTF.

....all the while spending another $400 billion of our money.

Col Hogan wrote:So those of us "under water" but are making our payments and don't have a Fannie or Freddie mortgage are screwed again...

Figures...

Right there with you.

AZGrizFan wrote:

OL FU wrote:Honestly, I will believe this one when I see it. Whether they will admit it or not, one of their problems is not simply that the economy isn't getting better with the stimulus bill, it is that they are out there touting the success of the stimulus bill while the country reacts with a big WTF. The last thing they need is a program like this which will benefit FANNIE creditors only, then the program not significantly help the housing industry while the the country has another reason to say WTF.

....all the while spending another $400 billion of our money.

They'd just piss it away in Iraq/Afghanistan anyway

houndawg wrote:

AZGrizFan wrote:

....all the while spending another $400 billion of our money.

They'd just piss it away in Iraq/Afghanistan anyway

Oh, they're STILL pissing away money there...this would be on top of that.

AZGrizFan wrote:

houndawg wrote:

They'd just piss it away in Iraq/Afghanistan anyway

Oh, they're STILL pissing away money there...this would be on top of that.

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

houndawg wrote:

AZGrizFan wrote:
Oh, they're STILL pissing away money there...this would be on top of that.

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.