Obama wasted no time going against what he talked about during his State of the Union campaign speech last week. All the things he said would stop, he is going to give bailouts, handouts and is copping-out. When will people realize the damage politicians have done to the financial and housing markets? Government intervention is what set us on this path.
From WaPo:
President Obama on Wednesday is expected to roll out new proposals aimed at helping troubled homeowners, including a plan that would allow more borrowers to take advantage of record-low interest rates and to lower their monthly mortgage payments.
About 3.5 million people could be eligible for the program, according to the Obama administration. The president will offer details of the proposal at 11 a.m. at the James Lee Community Center in Falls Church.
This “new” idea does not help the millions of Americans already going through record foreclosures.
The renewed efforts, which Obama foreshadowed during his State of the Union address last week, mark another of a series of initiatives aimed at lifting the nation’s ailing housing market. There’s rapidly growing consensus that the nation’s housing woes are holding back the economic recovery.
A central piece of the president’s plan would allow qualified homeowners to refinance their mortgages at current historically-low interest rates. Unlike earlier proposals, the new refinance measure will cover not only home loans guaranteed by federal mortgage giants Fannie Mae and Freddie Mac but also those owned by private investors, according to senior administration officials.
The cost of undertaking those refinancings, Obama said last week, would be paid for by a fee on large financial firms to ensure “it won’t add to the deficit and will give those banks that were rescued by the taxpayers a chance to repay a deficit of trust.” The program’s estimated price tag is between $5 billion and $10 billion.
Another violation of contract law. Obama wants to force lenders to change contractual agreements in order to lower interest rates on home mortgages. That is a loss of profit and will be charge back to other consumers in some form. Then Obama wants to force banks to pay a fee, which results in more profit loss that will be charged back to the consumers. In other words, another redistribution of wealth scheme from Obama.
Many troubled borrowers could benefit greatly from today’s low interest rates but have been unable to qualify for refinancing, either because their homes have lost so much value or their their credit ratings aren’t high enough.
According to the proposal, borrowers would be eligible for refinancing if they have a minimum credit score of 580 and a loan that falls within the Federal Housing Administration’s limits, which range from $271,050 to $729,750.
The government also is willing to pay closing costs for those who agree to use their savings to pay down the principal of their mortgages rather than reducing their monthly payments, the administration official said.
Translation: The taxpayers will cover the closing costs, plus bailing out the banks and giving handouts to the irresponsible who signed a contract to pay for a house they couldn’t afford. Obama is a cop-out for pushing the same schemes that caused the housing crisis in the first place.
