The newest re-election strategy

With the war on the rich, big oil, women and the Supreme Court not gaining enough traction, last week the administration tacked in a different direction…home mortgages.

First, let me give you a bit of background.  Ed DeMarco was given the thankless job of conserving the assets of Fannie Mae and Freddie Mac until Congress could figure out to do with them. 

So far, he has

completed more than 1.1 million loan modifications and one million ‘foreclosure prevention’ transactions, including forebearance plans, short sales, deeds-in-lieu and more.  The toxic twins have also done 10.4 million refinancings, 1.1 million under the Administration’s Home Affordable Refinance Program.

But, that wasn’t good enough.  The administration and Democrats in Congress have been demanding that Mr. DeMarco “write down principal” on loans.  In other words, if your home mortgage held by Fannie Mae is, say $100,000, Fannie should send you a letter saying that your mortgage is now only $50,000.  Mr. DeMarco has consistently refused those demands, arguing that such a move would deplete the very assets he was directed to conserve. 

Throwing him out would create a fire storm of criticism, so, the administration has come up with a new idea, thanks to the quick thinking of Treasury Secretary, Timothy Geithner.  Here is the new plan…

Treasury has some $20.9 billion in leftover TARP money.  Treasury will transfer a large chunk of that money to Fannie and Freddie who will then use it to subsidize the write downs of mortgages under the administration’s Home Affordable Modification Program, aka, HAMP.

One is eligible for HAMP if you are delinquent in your mortgage payments.  Thus, those homeowners who are “underwater” and who have not been paying their mortgage payments on Fannie or Freddie loans could well find their mortgage reduced, while those who have been paying, but who are also “underwater”, get  no relief, and are left to subsidize their neighbors.

Subsidize, you say?

Instead of using TARP money to reduce the [current year’s] $1.3 trillion federal deficit, Mr. Geithner now wants to hand it to [Fannie and Fredie] so Mr. DeMarco can’t object to principal writedowns…Treasury and President Obama get their election-year bailout without having to fire Mr. DeMarco.  The big losers are taxpayers–and Americans foolish enough to make their mortgage payments on time.

To me, this is “trolling for votes” at its lowest.

19 replies
  1. stinkfoot
    stinkfoot says:

    He’s buying votes then… or at least attempting to.

    I’m not sure I get the rationale for ignoring those holding “underwater” mortgages who are actually making payments on time.? If it were me I’d prefer to throw the $20.9 billion at people who might then use it to do some improvements to their property… by buying stuff and employing contractors- you know, actually stimulate the economy- not to mention increase to some degree property tax revenues collected when that expenditure results in an appreciated estimated value on which the tax would be assessed.? $20.9 billion if used in the economy of this sates would yield $1, 327,150 000.00 in sales tax revenue alone- now I don’t know how many Connecticut mortgagees would qualify for this “HAMP” program but it doesn’t make a lot of sense to? give such relief to people who are likely looking for an out and not likely to show any return for the “taxpayer’s money”? (typed with a straight face) and those showing a willingness to hang on to their investment would likely handle it in a way that would yield some sort of return not only for the state but also the town that the property is located in.?
    I do not buy into the assumption that either he or…

    • stinkfoot
      stinkfoot says:

      (character limit reached, re-submitting the remainder)
      I do not buy into the assumption that either he or those advising him are too stupid to realize this.? It makes me wonder if the decision may have been based to some degree on the expected political leanings of those willing to work hard in order to keep current with their obligations to be staunch conservatives and therefore not worth the effort to render assistance as far as this liberal administration is concerned.

      • just sayin
        just sayin says:

        Stinkfoot, me thinks you are on to something.
        But the whole thing stinks, and it’s sure not emanating from you!

  2. stinkfoot
    stinkfoot says:

    @just sayin
    I know that it stinks… but not the way that inadvertent incompetence stinks… it reeks of a mind set that is determined to undermine any possible economic recovery by ensuring those who most are likely to create that recovery by their spending, are left with the unreasonable burden of underwater real estate which they cannot borrow against the equity precisely because of the property worth less than the remaining balance of that mortgage.
    In short, it’s effectively a war against anyone striving to remain part of the so-called middle class… and the tactics are going to help the confidence of anyone seeing to buy housing.? It wouldn’t shock me to learn that it’s federal policy that is keeping the housing recovery in its current state of great distress.? Nothing this government does reflects any concern for the plight of its citizens beyond exploiting the situation in order to get its own way.? Hilliary and Rahm both said it, “never let a perfectly good crisis go to waste.
    How can I support any administration that repeatedly and consistently shows its contempt for me?

  3. slruest
    slruest says:

    If a foreclosure crisis is at hand then the federally subsidized programs naturally will come first.? The problem is that this avenue does not fix the problems within Fannie or Freddie nor? provides fair consideration to the taxpaying American.? Is simply cuts the losses to a federal program designed for wealth distribution.

  4. dairyair
    dairyair says:

    “The big losers are taxpayers?and Americans foolish enough to make their mortgage payments on time.”
    Well. of course we’re the losers, what else is new? Stinkfoot makes a great point…give it to those who are struggling yet still living up to their obligations. No, let’s give it to those who can’t/won’t/just refuse to make their payments. If they can’t pay off 100K, what makes them think they’ll suddenly start making payments they probably can’t afford anyway. And when do they say, “well, the gubmint will just bail me out again.”
    ? Stinkfoot’s suggestion makes more and more sense as I think about it.

  5. Dimsdale
    Dimsdale says:

    HAMPer the economy by punishing those that made the sacrifices and good choices to be able to afford their homes and reward those that did not.? Nice.? It is one thing to renegotiate loans, with all parties in agreement, and quite another to subsidize their principle.
    I have to wonder if the bad faith generated in the majority of homeowners that did it the honest way will offset the votes he buys with this tripe.? I imagine the liberal media will “report” this in such a way that the pertinent facts are dutifully obscured.

  6. stinkfoot
    stinkfoot says:

    What this election needs is a viable Green Party candidate in order to split the liberal vote.

  7. JBS
    JBS says:

    This move is designed only to make the Regime look better — they are ALL ABOUT surface over substance. Move the $20.9 BILLION in leftover TARP money (how well did that work?) to make the Fannie/Freddie asset situation look better and you have an instant campaign point to crow about. The MSM won’t waste a syllable reporting that the money was moved in a slick accounting gimmick. A pea under the shells.
    Hey, there is another $170 million in Department of Energy money ready for loan guarantees! The DOE will even subsidize part or all of the “application fee”.
    I know it’s a piddly amount, but . . .

    • stinkfoot
      stinkfoot says:

      Yes- but look better to whom?? Certainly the regime doesn’t look better to anyone with a functioning brain who has taken in all the rhetoric about wanting to grow jobs and stimulate the economy but the actions taken show something very different.? It seems to reflect a desire to keep the economy sluggish and it also seems calculated to divide us further which is exactly the kind of thing I’d expect from an administration fond of playing class envy tactics in demonizing those who have achieved some success.
      Funny how there’s all this talk about how to blow leftover TARP billions… aren’t we running a HUGE (and growing) budget deficit?? When does the spending spree end?

  8. WagTheDog
    WagTheDog says:

    I think they missed the acronym by one letter – instead of “Home Affordable Modification Program” (HAMP), it should be “Home Emergency Modification Program” (HEMP).? Which is what they are smoking, me thinks.

  9. SeeingRed
    SeeingRed says:

    The newest re-election strategy (?)

    I think that the election strategy thus far has been to throw lots of the well known commodity against the wall, see what?sticks, and move on to the next toss?in a frantic motion.? I guess that’s what you have to do when you can’t reiterate your ‘accomplishments’ of the most recent 3.4 years.?

  10. winnie
    winnie says:

    Obama has been consistently dishonest.? He can now add ‘sleazy’ to his list of attributes.

    • stinkfoot
      stinkfoot says:

      I agree- though I will differ on the premise that this is what has qualified him as a sleaze and that he hadn’t already earned that distinction.? The class warfare coming not only from his administration but directly from him is sleazy because when one stops to think one quickly realizes that not only? would it be impossible to balance the budget on the backs of the wealthy but that almost without any doubt, Obama knows that as well… he’s just working to tray and soften us for the HUGE additional tax burden we’re in for after an election that sees him getting a second shot at creating crisis motivated support for a hugely expanded bureaucracy by taking rhetorical and legislative aim at the heart of free market capitalism.

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