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View Full Version : January Surprise: Is Obama preparing a trillion-dollar, mass refinancing of mortgages



txradioguy
01-06-2012, 06:03 AM
This could be just the beginning. If President Barack Obama’s legally dodgy appointment of Richard Cordray to head the consumer finance agency should stick, it may open the door to more such actions. Here’s Jaret Seiberg of the Washington Research Group:


To us, the most important takeaway from a recess appointment of Cordray is that the President could use this same maneuver to put a housing advocate in charge of FHFA.

And why is that important? The Federal Housing Finance Agency is the regulator and conservator of Fannie Mae and Freddie Mac. And the FHFA currently has an acting director, Edward DeMarco. If Obama replaces him with a “housing advocate” via the same recess appointment process, here’s what might happen next, according to Seiberg:


That could lead to a mass refinancing program for agency-backed mortgages that would go well beyond the existing HARP program. That could hurt agency MBS pricing and result in higher financing costs going forward. Yet it also could be a big boost for the economy and housing going into the election.

Indeed, my sources tell me the Obama administration has been eager to implement just such a plan, but needs to have its own man heading the FHFA to make it happen. The plan would be modeled after one originally devised by Columbia University economists Glenn Hubbard (a campaign adviser to Mitt Romney and AEI visiting scholar) and Christopher Mayer. In recent congressional testimony, Mayer described how the mass refinancing plan would work:


Under our plan, every homeowner with a GSE mortgage can refinance his or her mortgage with a new mortgage at a current fixed of 4.20 percent or less. … To qualify, the homeowner must be current on his or her mortgage or become so for at least three months. … Other than being current, we would impose no other qualification or application, except for the intention to accept the new rate (that is, no appraisal, no income verification, no tax returns, etc.).

http://blog.american.com/2012/01/january-surprise-is-obama-preparing-a-trillion-dollar-mass-refinancing-of-mortgages/

Rockntractor
01-06-2012, 10:34 AM
That is all Rush could talk about yesterday, Obama may attempt to buy the election.

Arroyo_Doble
01-06-2012, 10:41 AM
That is all Rush could talk about yesterday, Obama may attempt to buy the election.

What a rotten trick. Work to improve the material conditions of the citizens of this nation as well as solving an intractable problem which has been a drag on the economy since the collapse of 2008.

Insidious of this president to curry favor with voters by actively trying to pull us out of our economic torpor.

linda22003
01-06-2012, 10:43 AM
You think he should override the contracts people willingly made for their mortgages?:confused:

Rockntractor
01-06-2012, 10:45 AM
What a rotten trick. Work to improve the material conditions of the citizens of this nation as well as solving an intractable problem which has been a drag on the economy since the collapse of 2008.

Insidious of this president to curry favor with voters by actively trying to pull us out of our economic torpor.

Put us in debt 1.2 trillion more and transfer more wealth that is unearned from one class to another.

txradioguy
01-06-2012, 11:01 AM
Put us in debt 1.2 trillion more and transfer more wealth that is unearned from one class to another.

Especially after then Senator Obama voted for the legislation that created this whole mess in the first place.

The banks didn't trick anyone into these morgatages...Congress set these people up for failure.

Tipsycatlover
01-06-2012, 11:30 AM
He's a dictator who is just beginning to exercise his power. He can do anything he wants until he is stopped. Just like any criminal. They run around robbing 7-11s, home invasions, banks, it doesn't matter. Then they are stopped. The commit crimes until then.

Novaheart
01-06-2012, 01:12 PM
What a rotten trick. Work to improve the material conditions of the citizens of this nation as well as solving an intractable problem which has been a drag on the economy since the collapse of 2008.

Insidious of this president to curry favor with voters by actively trying to pull us out of our economic torpor.

good one

Novaheart
01-06-2012, 01:13 PM
He's a dictator who is just beginning to exercise his power. He can do anything he wants until he is stopped. Just like any criminal. They run around robbing 7-11s, home invasions, banks, it doesn't matter. Then they are stopped. The commit crimes until then.

You would be funny if you didn't actually believe the crap you write.

Novaheart
01-06-2012, 01:19 PM
You think he should override the contracts people willingly made for their mortgages?:confused:

It's actually a fairly stupid move on the part of the underwater borrower, and an attempt to exploit middle class paycheck mentality by the government and banks.

Jane owes $160,000 on a house that is only worth $65,000 at best. This is a real person who lives near me. She couldn't afford the mortgage anymore due to financial changes, and she went to foreclosure. The bank "modified her loan", so now she still owes more than the house is likely to be worth in the next ten years or more, but the loan is affordable as long as the rent she gets will support it. Any corporation would have walked away from this asset. They would not have simply refinanced the dead weight.

Unless these mortgages are going to be refinanced AND modified in principle, then we're simply creating more bad paper.

Bailey
01-06-2012, 01:20 PM
You would be funny if you didn't actually believe the crap you write.

What part of spending another 1.2 trillion dollars we don't have under shady maneuvers don't you understand?

Novaheart
01-06-2012, 01:25 PM
What part of spending another 1.2 trillion dollars we don't have under shady maneuvers don't you understand?

It would be better if everyone who is upside down would just walk away.

It would be cheaper by the cost of ink if the government were to make deficiency judgements illegal as well as negative credit reporting on deed in lieu.

Bailey
01-06-2012, 01:29 PM
It would be better if everyone who is upside down would just walk away.

It would be cheaper by the cost of ink if the government were to make deficiency judgements illegal as well as negative credit reporting on deed in lieu.

ok steal more money from the tax payers to cover loans people shouldnt have signed in the frist place. gotcha

Rockntractor
01-06-2012, 01:32 PM
ok steal more money from the tax payers to cover loans people shouldnt have signed in the frist place. gotcha

That's not really what he is saying, the bank would own the property in Nova's scsenario.
What Obama would like is for the people to keep their property and others pay the tab.

Bailey
01-06-2012, 01:35 PM
That's not really what he is saying, the bank would own the property in Nova's scsenario.
What Obama would like is for the people to keep their property and others pay the tab.

What boils my blood is that I cant afford to own a house at the moment so i dont buy one and now my taxpayer dollars are going to bail out idiots who shouldnt have bought a house it the first place. screw it where do i go to get some free money for a house?

Rockntractor
01-06-2012, 01:42 PM
What boils my blood is that I cant afford to own a house at the moment so i dont buy one and now my taxpayer dollars are going to bail out idiots who shouldnt have bought a house it the first place. screw it where do i go to get some free money for a house?

That woman and I have scraped and saved for years to keep or mortgage paid and keep our head above water but Obama will take our money through increased taxes and transfer it to the social classes he proclaims deserving just to buy another term.

Bailey
01-06-2012, 01:45 PM
That woman and I have scraped and saved for years to keep or mortgage paid and keep our head above water but Obama will take our money through increased taxes and transfer it to the social classes he proclaims deserving just to buy another term.

I dont get how using tax payer monies is going to improve the economy? Can someone explain this to me?

Rockntractor
01-06-2012, 01:46 PM
This really pisses me off, they will send people around to conservative forums to call us racist while they are taking our money for redistribution and promoting class envy all the while.
This is it America, you can equally benefit from loafing, no need for hard work and honesty.

Novaheart
01-06-2012, 01:56 PM
ok steal more money from the tax payers to cover loans people shouldnt have signed in the frist place. gotcha

You are applying a middle class sensibility to this rather than an economic one. The mortgage is dead money. If Family A is spending $2000/mo on negative equity and their income has been reduced by 25% due to earner #2 going from good paying job to Walmart, then they are throwing good money after bad, money which could be going into durable goods or some other manufacture or local service. I didn't make this up, I saw it in the paper.

If Family A is spending $2000/mo on dead equity in a $1000/mo rental market, then walking away from the deadweight makes sense for them as well as promises to improve the economy.

Novaheart
01-06-2012, 02:04 PM
That's not really what he is saying, the bank would own the property in Nova's scsenario.
What Obama would like is for the people to keep their property and others pay the tab.

Something people seem to believe is that HAMP is reducing the principle. Wrong. These HAMP loans are every bit as ugly as the loans they are replacing, and in some cases the principle actually increases to include missed payments, fees, and legal BS.

Any program which leaves people trapped in homes the can't sell doesn't make sense. The destructive force in real estate right now isn't that "the bottom has dropped out" so much as it is that you can't sell houses because just as soon as you sell a few, those looking to escape go on the market and force it back down.

Anyone buying a house in a former bubble zone right now is kidding himself unless he's getting a really really especially good deal. There are monsters in the bushes, empty houses in waiting and foreclosed properties. In a place like Oklahoma and rural Ohio where housing prices were low but stable during the coastal (and Phoenic/Las Vegas) bubble you might be able to buy with confidence. Around here, I would look up the 1995 price of a house and pay not a dollar more for it in 2012. Any seller who doesn't get that is either stupid or looking for a sucker.

Novaheart
01-06-2012, 02:09 PM
This really pisses me off, they will send people around to conservative forums to call us racist while they are taking our money for redistribution and promoting class envy all the while.
This is it America, you can equally benefit from loafing, no need for hard work and honesty.

If you sincerely believe that the housing bubble was caused by Barney Frank forcing banks to lend to unqualified black people, then you deserve to be called a number of things.

Don't forget that a lot of people made a lot of money in the bubble. A lot of "greatest generation" folks have full bank accounts from what they got for their houses. A lot of realtors bought a lot of Cadillacs, a lot of "loan officers" and "mortgage bankers" bought a lot of BMW's and boats and trips to Cancun, and new kitchens and bathrooms, and all sorts of big ticket items with big ticket commissions. A lot of taxes were collected and spent on local improvements visual and structural.

The bubble benefited a lot of people who simply walked away with the cash. Only an idiot would think that all of those people were black, Democrats, or whatever.

Rockntractor
01-06-2012, 02:36 PM
If you sincerely believe that the housing bubble was caused by Barney Frank forcing banks to lend to unqualified black people, then you deserve to be called a number of things.

Don't forget that a lot of people made a lot of money in the bubble. A lot of "greatest generation" folks have full bank accounts from what they got for their houses. A lot of realtors bought a lot of Cadillacs, a lot of "loan officers" and "mortgage bankers" bought a lot of BMW's and boats and trips to Cancun, and new kitchens and bathrooms, and all sorts of big ticket items with big ticket commissions. A lot of taxes were collected and spent on local improvements visual and structural.

The bubble benefited a lot of people who simply walked away with the cash. Only an idiot would think that all of those people were black, Democrats, or whatever.

You should be called an ostrich.

NJCardFan
01-06-2012, 02:42 PM
I didn't go out and buy a house I couldn't afford otherwise, I went out and bought a house within our means. And I didn't go out and buy the $50,000 Escalade to put in the driveway. I bought a used Escape for my wife and a very(200K miles) used Explorer for me. Now, since I haven't defaulted on my mortgage, can I get mine paid off too? I mean, why should the guy up the street who got foreclosed on get in on the gravy train but not me?

Oh, and pay heed to this quote: "When you rob Peter to pay Paul you will always have the support of Paul."

Also, "A government big enough to give you everything you want is also big enough to take everything you have."

Is this a country you wish to live in?

txradioguy
01-06-2012, 03:12 PM
If you sincerely believe that the housing bubble was caused by Barney Frank forcing banks to lend to unqualified black people, then you deserve to be called a number of things.


First and foremost of thins "things" being factually accurate.

There was no redlining going on.

Odysseus
01-06-2012, 05:18 PM
What a rotten trick. Work to improve the material conditions of the citizens of this nation as well as solving an intractable problem which has been a drag on the economy since the collapse of 2008.

Insidious of this president to curry favor with voters by actively trying to pull us out of our economic torpor.

Except that this won't improve the material conditions of the citizens. It will, at best, improve the temporary material positions of those citizens who purchased homes beyond their means, but in order to do so, will increase the national debt even more than he already has. He's simply socializing the debts of the least credit-worthy by forcing solvent taxpayers to subsidize their new interest rates. And, when many of them end up defaulting anyway, the taxpayers will be on the hook for even more. And, when those original borrowers still can't make their payments, and default, the increased exposure will put more strain on the rest of the economy, pushing everyone into a decreased material position.


You are applying a middle class sensibility to this rather than an economic one. The mortgage is dead money. If Family A is spending $2000/mo on negative equity and their income has been reduced by 25% due to earner #2 going from good paying job to Walmart, then they are throwing good money after bad, money which could be going into durable goods or some other manufacture or local service. I didn't make this up, I saw it in the paper.

If Family A is spending $2000/mo on dead equity in a $1000/mo rental market, then walking away from the deadweight makes sense for them as well as promises to improve the economy.

It makes sense for them, but it doesn't make sense for the taxpayer to pick up the tab. It's not a middle class sensibility, it's simple economics. First, there's no such thing as "dead equity". There's a property that has a market value. If the mortgage is $2,000 and the home's rental value is $1,000, then the rent represents a $1,000 per month loss, but the home is still worth something, just not as much as was paid for it. Assuming the value has dropped by half, it's still an asset, and eventually, can always be sold for its market value, which is not as much as it was. The longer the borrower pays off the mortgage, the less they have to get for the house in order to get out from under the loan. The borrower has several options: To rent the home for less than the monthly mortgage payment and take the loss over time and hope that the home will recover some value, to sell the home for less than they paid and take the loss up front (assuming that they cannot hold onto the home at the current rent or don't see the market recovering) or, they can default on the mortgage, in which case the bank will take possession of the home and sell it for whatever it can get, with the understanding that they are now going to have to declare bankruptcy. Those aren't great options, compared to having the home retain its value, but you have to choose among the options available, not what you'd like them to be. I had to explain this to Mrs. O when we had a similar problem with our house in TX. The market is down, but we chose not to sell at a loss and we ended up with a renter after about five months, so we're stil building up equity. Even when we didn't have a renter, we were building equity, but we were doing it out of our own pocket instead of having a renter do it. Eventually, we'll sell the house and the equity that we've built up will become cash, but until then, the house is basically a very large piggy bank. People who don't get that, or who bought inflated homes without understanding the underlying fundamentals of the markets will lose money, but that's how markets work. Obama either doesn't get that, or is hoping that enough voters don't get that to keep him in office, but either way, he's pursuing bad policies.

DumbAss Tanker
01-06-2012, 05:55 PM
You are applying a middle class sensibility to this rather than an economic one. The mortgage is dead money. If Family A is spending $2000/mo on negative equity and their income has been reduced by 25% due to earner #2 going from good paying job to Walmart, then they are throwing good money after bad, money which could be going into durable goods or some other manufacture or local service. I didn't make this up, I saw it in the paper.

If Family A is spending $2000/mo on dead equity in a $1000/mo rental market, then walking away from the deadweight makes sense for them as well as promises to improve the economy.

That would only be true if your banker was Scrooge McDuck and he kept all the money from the payments in the Duckburg Money Bin. In real life it is recirculated in other forms such as car loans, student loans, other housing loans, etc., and never leaves the economy, it is just spent by different people.

I don't have any sympathy for the underwater crap. It's a chance the borrower took when the mortgage was signed, like any other damn' contract.

Novaheart
01-06-2012, 11:52 PM
First, there's no such thing as "dead equity". There's a property that has a market value. If the mortgage is $2,000 and the home's rental value is $1,000, then the rent represents a $1,000 per month loss, but the home is still worth something, just not as much as was paid for it. Assuming the value has dropped by half, it's still an asset, and eventually, can always be sold for its market value, which is not as much as it was. The longer the borrower pays off the mortgage, the less they have to get for the house in order to get out from under the loan.

There are scenarios where it makes sense to keep paying the mortgage. If your mortgage payment is $1000 a month and that's roughly what it would cost to rent a similar home, then you might as well stay where you are (assuming that you want to) and pay the $1000 month mortgage even if the house isn't worth the remaining debt.

One of the problems in Florida is that people are being tag teamed by the economy, banks, and insurance. Many of the people walking away from their homes were pushed over the edge by mortgage payment increases due to a conspiracy on the part of the federal government's flood insurance program and homeowners insurance companies.

To give you an example of what they are doing to people, when I got my mortgage 15 years ago, my property taxes and homeowners insurance were each about $400 a year. My property tax is now $800 a year, but my insurance is $2200 a year. The insurance company will not permit me to only insure for the actual local replacement cost of the house which is about half what the insurance company says it would be. Why? Because the insurance company is using Dade county premium construction high hurricane zone rates of $179 per square foot, and I can replace this house for $86/sf. Why are they doing this? To inflate the deductible. It would be illegal in almost any other form of insurance, but the homeowners insurance companies and banks have conspired to do this. Enter National Flood Insurance. They want more money in the kitty- so they redrew the flood zones to include houses which have never flooded in the history of Pinellas County. Never. And they require your flood insurance to match your hurricane insurance. Why? To artificially inflate the deductible so they won't actually have to pay out on most claims.

Some people's mortgage payments have doubled or tripled since they bought their houses- that's not supposed to happen.

Rockntractor
01-06-2012, 11:58 PM
That would only be true if your banker was Scrooge McDuck and he kept all the money from the payments in the Duckburg Money Bin. In real life it is recirculated in other forms such as car loans, student loans, other housing loans, etc., and never leaves the economy, it is just spent by different people.

I don't have any sympathy for the underwater crap. It's a chance the borrower took when the mortgage was signed, like any other damn' contract.

Contracts stopped having meaning when GM stiffed all its bondholders and gave the company to the union.
I trust nothing with government ties anymore, they are lawless.

Novaheart
01-07-2012, 11:58 AM
Contracts stopped having meaning when GM stiffed all its bondholders and gave the company to the union.
I trust nothing with government ties anymore, they are lawless.

I think you can go back farther than that. What happened to American confidence in our corporations when some of them trashed their pension funds and f'd over their retirees? What happened to American opinion of corporations and executives when they move minwage manufacturing jobs out of Monroe Florida and send them to Hecho en Mexico?

It's not just your favorite union devil, it's that these corporate executives who wear blue suits with red ties and flags on their lapels and have less loyalty to this country than most illegal aliens. At least the children of illegal aliens disproportionately serve in the armed forces as I understand it. How many of the kids of Fuck America Inc. serve in the military?

Odysseus
01-07-2012, 12:30 PM
There are scenarios where it makes sense to keep paying the mortgage. If your mortgage payment is $1000 a month and that's roughly what it would cost to rent a similar home, then you might as well stay where you are (assuming that you want to) and pay the $1000 month mortgage even if the house isn't worth the remaining debt.

One of the problems in Florida is that people are being tag teamed by the economy, banks, and insurance. Many of the people walking away from their homes were pushed over the edge by mortgage payment increases due to a conspiracy on the part of the federal government's flood insurance program and homeowners insurance companies.

To give you an example of what they are doing to people, when I got my mortgage 15 years ago, my property taxes and homeowners insurance were each about $400 a year. My property tax is now $800 a year, but my insurance is $2200 a year. The insurance company will not permit me to only insure for the actual local replacement cost of the house which is about half what the insurance company says it would be. Why? Because the insurance company is using Dade county premium construction high hurricane zone rates of $179 per square foot, and I can replace this house for $86/sf. Why are they doing this? To inflate the deductible. It would be illegal in almost any other form of insurance, but the homeowners insurance companies and banks have conspired to do this. Enter National Flood Insurance. They want more money in the kitty- so they redrew the flood zones to include houses which have never flooded in the history of Pinellas County. Never. And they require your flood insurance to match your hurricane insurance. Why? To artificially inflate the deductible so they won't actually have to pay out on most claims.

Some people's mortgage payments have doubled or tripled since they bought their houses- that's not supposed to happen.

The example that you cited has two problems. First, it hasn't effected the mortgage that you're paying. The added expenses of increased taxes and insurance premiums have nothing to do with your mortgage. You've specifically said that their mortgages are increasing, and with the exception of a balloon payment, I can't see how that can happen unless the home owner refinances and incurs more debt, which is still his own fault. The flood insurance ought to be based on the replacement costs, but if the insurance company is citing an artificially high cost, then you have grounds for a class action suit to get the premiums reduced (and I'm sure that there is no shortage of lawyers who would take that case). Even the threat of such a lawsuit would probably get the company to reduce its assessment. However, if it is the result of collusion between the insurance company and government, well, welcome to the wonderful world of cronyism, which, with the added inducement of "the common good" or some other socialist nonsense, is pretty much Obamanomics in a nutshell. The only solution there is to expose it and vote the bastards out. But, none of this changes what Obama is doing, or even impacts on it. He's racking up more debt for all of us in order to provide relief for a small constituency, at the expense of the rest of us.