Obama Housing Policy Like a Gift From Your Grandma
January 26th, 2012When you get a gift from your grandmother, you appreciate the good intentions, however you know you’re probably not going to like it. The same is true for Obama signature policies; Obamacare, Dodd Frank, and HAMP. All programs with good intentions that we don’t like.
Hamp is the failed $75 billion mortgage modification program meant to help four million homeowners who were underwater or delinquent on their mortgages in 2009. Good news it’s now 2012, and only two million families are delinquent on their mortgages headed for the foreclosure grinder now that legal objections to robo signing have been resolved.
Approximately thirty percent were helped, many gave up when trapped in an endless bureaucratic nightmare, but most just walked away from their homes or were foreclosed. Good intentions gone bad.
Now comes President Obama in his State of the Union message telling us that: While government can’t fix the problem on its own, responsible homeowners shouldn’t have to sit and wait for the housing market to hit bottom to get some relief. That’s why I’m sending this congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low interest rates No more red tape. No more runaround from banks. A small fee on the largest institutions will insure that it won’t add to the deficit, and will give banks that were rescued by taxpayers a chance to repay a deficit of trust.
My Midwestern translation; banks bend over and grab your ankles, taxpayers get in line, you’re next.
Government can’t fix the problem on their own, because they have never acknowledged they are the problem. The CRA and political cronies like Franklin Rains running Fannie Mae caused the problem. The first step to recovery is to identify you are the problem. Responsible homeowners can’t wait for the market to hit bottom because government keeps delaying the inevitable.
Every responsible homeowner? If HAMP was meant to save underwater homeowners, exactly who are you trying to save? Responsible homeowners are current on their mortgages. Streamlining a program makes these homeowners responsible how?
No more red tape. Really? Milton Friedman said it best, if you put the federal government in charge of the Sahara desert we would have a sand shortage within five years.
Refinancing at record low rates to save about $3,000 on their mortgage? That works out to about $250 a month which is substantial to many families. However if you don’t have a job, or are forced to working part time, which represents about twenty-five million Americans, what increased their ability to make a $1000 a payment instead of a $1,250 payment?
A small fee on the largest financial institutions will ensure that it won’t add to the deficit. Really? Where will the banks get the refinance money? Fannie, Freddie, or the FHA? All three are running deficits today. What makes you believe this won’t add to the deficit by loaning money to banks that they don’t have? Is that the reason Fannie and Freddie just asked for another $100 billion? How is that not an increase to the deficit?
If this is truly paid for with a fee by the banks, who will pay that fee? Just taking a wild guess that the fee will be passed along to home buyers in their closing costs. Excellent idea, disqualify more prospective home buyers from being able to buy a home when 2011 just had the fewest new homes built on record, the fewest new homes sold on record, and the second fewest existing homes sold on record.
This coming on the heels of the ingenious Obama, Reid sixty day extension of the Social Security Payroll Tax Holiday. How did they pay for those sixty days of relief? They added a fee to Fannie and Freddie loans for ten years.
Too little too late President Obama. I suggested in 2009 that in order to save homeowners from foreclosures due to adjustable rates resetting, to waive the appraisal provision this one time. That would have instantly saved an untold number from foreclosure. Glad you came to the party three years late.
If Obama were in Army demolition, instead of setting the charge off when told, he would wait until after the enemy had crossed the bridge and breached the perimeter.
Yes, an Obama policy is like a gift from your grandmother, you appreciate the intention, but you know you’re probably not going to like it.
The opinions expressed here are solely those of Fritz Pfister or identified sources, and not necessarily those of RE/MAX Professionals of Springfield or RE/MAX International.
