Fritz Pfister

Are you a responsible homeowner? Have you made your house payments as agreed? You know, according to those pesky documents you signed at closing when you purchased your home? You have made your payments for how many months and years?

What about your taxes? Have you paid your property taxes? How about your social security, Medicare, state, and federal taxes? How long have you made those payments as ordered, and mandated by law?

How many of you have heard of Fannie Mae, Freddie Mac, and FHA? Did you know Fannie and Freddie were used by politicians for social engineering? Liberals like Barney Frank, Chris Dodd, Ted Kennedy, Bill Clinton, Maxine Waters, Andrew Cuomo, and the like saw to it that owning a home would be affordable for all Americans especially the low income; whether they could afford it or not!

Here’s what Barney Frank said as House Financial Services Committee Chairman, July 14, 2008; “I think this is a case where Freddie Mac and Fannie Mae are fundamentally sound, They’re not in danger of going under….I think they are in good shape going forward.”

Within two months the government nationalized, and took over Fannie and Freddie before they collapsed putting taxpayers on the hook for an estimated $1 to $1.5 trillion in addition to the $5 trillion in mortgages held by these now wholly government owned mortgage companies.

What does all this have to do with responsible homeowners that make their house payments, and pay their taxes? Be alert for news coming out of Washington D.C. when congress returns before the election. The Obama Administration floundering in their attempts to get the economy going, understand that they must stabilize the housing market.

Are you ready? Obama could be proposing a government program through Fannie and Freddie to refinance 1.5 million mortgages that are deemed to be under water, with you the responsible house payment making taxpayer absorbing the loss for the malfeasance of prior government actions and irresponsible borrowers. This could add up to hundreds of billions. It could even excede the amount of the failed stimulus at near a trillion dollars.

What’s a home that’s under water? No not from a flood or hurricane, but where the fair market value of a home is less than the amount owed. This is the result of the run up in prices that could not be sustained, and hundreds of thousands of folks got left holding the bag when the housing bubble popped.

I’m not saying there aren’t hundreds of thousands of good people that got caught in the trap. I believe we should help these people, however it is not fair for responsible home owning taxpayers to bail out these folks, and ultimately the government that created the problem in the first place.

Many will go into foreclosure, or simply walk away from their homes rather than sacrifice years of labor paying for a home that’s not worth what they owe in TODAY’S market. One of the primary reasons these people are having difficulty is due to the size of their payment. Many have adjustable rate mortgages or mortgages 6% or higher from when they purchased their homes.

Why continue the struggle when these home owners see interest rates near 4%, which would save them hundreds monthly and thousands annually, when they don’t qualify for the refinance because the home won’t appraise high enough to meet today’s lending guidelines?

Here’s my solution; waive the appraisal requirement for all homeowners whose mortgages are under water. They will be able to afford to stay in the home while the economy rebounds and the value of their home increases. There’s no guarantee prices will increase to when they purchased the home, however they will realize some appreciation as they pay down the principal making the situation palatable.

How much would this solution cost tax payers like you? Zero, zip, nadda. How much will the Obama plan cost you? Nearly a trillion dollars plus interest because the government is broke and will have to borrow or print the money. Government, and banks get bailed out, those homeowners deemed under water get their mortgages reduced by tens of thousands of dollars, while you get stuck with the bill.

What? You don’t think this is constitutional? Spending must be initiated in the house? That hasn’t stopped Obama yet. Look at Obama’s firing of the GM CEO and nationalizing GM by threat of harassment forcing rightful creditors to the back of the line to save the UAW. Or the strong armed establishment of the $20 billion escrow from BP with AG Holder standing in the corner posing possible prosecutorial threats. The authority for these actions by the executive branch can’t be found in the constitution.

I don’t know about you, but my congressman will know how I feel about any proposal like this. Here’s the problem; Obama could simply order Geithner at Treasury to use the government owned Fannie and Freddie to start the bail out. Who will stop him?

Now it makes sense why unilaterally Obama and Geithner removed the $400 billion limit last fall that they had set on additional losses for Fannie and Freddie. No new ceiling for losses was established. Guess Obama and Geithner think your generosity, charity, good will, and resources are unlimited.

Sure pays in Obama’s transformational America to do what is right. Keep paying your mortgage, and keep paying your taxes. You are the producer that makes the country work, while Obama and the other liberal entitlement grantor’s, and wealth redistributionists laugh and call you ’suckers’.

Happy Labor Day 2010. Any bets Labor Day 2011 will be different?

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.