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.).
Mayer estimates that some $3.7 trillion of mortgages would be refinanced. That’s right, this would be the Mother of All Mortgage Refinancing Plans. It would help roughly 30 million borrowers save $75 billion to $80 billion a year. As Mayer puts it: “This plan would function like a long-lasting tax cut for these 25 or 30 million American families.”
On his website, Hubbard says the plan would have an immediate fixed cost to the government of $121 billion $242 billion with half that cost split equally between the government and lenders. And he calculates the economic impact as follows:
1. We estimate that 72 percent of owner occupant homeowners would be eligible to refinance at no cost to them. Their monthly mortgage payments would fall by an average of $355, for a total national fiscal injection $7.1 billion each month.
2. The typical borrower would reduce his or her principal and interest payments by about $350 dollars, a total reduction in mortgage payments of nearly $100 billion per year.
3. The macroeconomic stimulus effect should also include an additional housing wealth effect. At the low end of our estimates, improved mortgage market operations would reduce house price declines by 10 percent. With an estimated aggregate housing valuation of about $18 trillion, housing wealth would increase about $1.8 trillion relative to what it might fall to without this program. If we assume a relatively low marginal propensity to consume out of housing wealth of 3.5 percent, U.S. consumption would rise by $63 billion relative to what would otherwise have occurred.
4. Combining these estimates gives a total macroeconomic stimulus of as $118 billion per year in lower mortgage payments and any new consumer spending due to a housing wealth effect. In addition to the direct macroeconomic stimulus, jump-starting the stalled housing market will increase employment in a variety of industries that depend on housing transactions (mortgage and real estate brokers, home supply companies, moving companies, etc.) as well as increase the efficiency of the labor market by reducing impediments to households moving to take another job.
Bottom line: Talk about a political and economic game changer in this presidential election year. Obama could offer a trillion-dollar stimulus — as measured over a decade –that would directly and immediately impact tens of millions of Americans suffering from the housing depression. Cash in their pockets. Imagine the electoral impact on key states, such as Florida, suffering from both high unemployment and devastated housing markets.
And the beauty part for Obama? He wouldn’t need approval from Congress to do it. Even though many Republicans would scream that the plan would reward irresponsible homeowners who took on too much leverage — indeed, talk of a housing bailout is what launched the Tea Party movement – they probably couldn’t stop it. And Hubbard already has an answer to the moral hazard issue: “This proposal requires borrowers to give up a share of future appreciation in order to participate. Lenders must eat a portion of the losses as well. Everyone gives a little bit.”
The 2012 battle for the White House is looking razor close. A mass refinancing plan might be enough to tip it to Obama.
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I’m having trouble comprehending some of these comments. How is it “leadership” when the prescident can step in and void a contract between two private parties and force one of the parties to “eat the loss”?!? Also, why are so many of you piling on the GOP? You conveniently forget that Barney Frank was the most ardent supporter and advocate of Fannie/Freddie?
What’s wrong with some Americans who expect the government (ie. other taxpayers) to save them from themselves? Buying a house is always risky. No one can foresee death, illness or a job loss. That’s why many responsible homeowners buy insurance and buy LESS house than they can afford and they don’t sign mortgage contracts they don’t understand.
Even when folks do the right things, unforeseen things happen (death, illness, job loss) that make home-ownership no longer affordable. That’s the luck of the draw. People with a good moral character will find a way to make the best of a bad situation and move forward without making demands on their fellow Americans.
When folks overextend themselves because they bought “too much house” or the government encouraged them to own a home they knew they couldn’t afford in the first place, why should responsible tax payers be forced to bail them out?
If Obama’s plan is to buy votes by creating this “mortgage stimulus”, then it makes me wonder why the mainstream media is willing to cover for a man who at best may be a one term president or at worst a two term president. The damage he’s inflicted on the country and will continue to inflict will last for generations. What’s in it for the mainstream media that they can remain silent in the face of all of these unconstitutional power grabs and election year antics? Don’t the members of the media have children too? What kind of a country do they want their kids to inherit?
Cathy, I will try this one more time. This program is to allow homeowners whose mortgages are gauranted by the federal govt the ability to refinance at today’s lower rates regardless of ltv. The gov’t and thus the taxpayers own the liability if these lenders default. Under ther terms of these mortgages (and virtually every residential mortgage) the borrower has the ability to pre pay with no penalty. The government – and thus us taxpayers are on the hook for 100% of the timely payment of principle and interest on these loans – all of which in the population being addresses here are underwater or have very little equity. Thus when individuals default we, the taxpayer suffer a loss. So what is the best way to avoid a loss – reduce the number of defaults. And what is the best way to reduce the default way – lower the borrowers payments. Now here is the beauty of this and the part your fox news brain keeps missing – the borrower can refinance their existing mortgage, pay off the holder of the mortgage 100% of the balance due and the government can rebundle and sell the loan off at par. Thus there is no cost to the taxpayer. Why does this work? Because the purchaser of the bond is not looking at the creditworthiness of the borrower or th ltv, they are looking only at the government gaurantee. Also it’s meaningless to the government that the mortgage is underwater because the government already owns that risk. By refinancing the properties (assuming the rate is priced correctly) the government does nor take on any incremental risk. Instead it makes less likely the borrower will default because his payment is lower (lower interest rate and the remaining balance is paid out over 30 years instead of the current remaining term). And these are borrowers that were current on their underwater mortgages. They have shown they do not want
to walk from them. Remember if these loans were not underwater they would have likely been refinanced. This plan has nothing to do with private mortgages. It only has to do with agency mortgages and it is a smart way to reduce the taxpayers exposure.
Oh, yes, a Fox devotee. Too much house, blah blah blah, good moral character…I can judge because I have good moral character but the poor slobs losing their homes are all BAD people…
She will never understand what you write because her brain is too indoctrinated by Fox News’lies. Only a very cold and uncaring person would wish for anyone to lose their home for any reason. She has little to no understanding of what has happened in the banking and financial industries nor in the real estate market. It is better to judge and hate on her neighbor — the neighbor is easy to see and doesn’t require any thought. Credit default swaps and mortgage backed derivatives are beyond the mental capacity of those plugged into Fox News 24/7 to comprehend. Nuanced argument and critical thinking are not encouraged by Fox News. Only hating on those they want to deem as “others” — oh yeah, and Cathy the Conservative is most likely also a Christian. Nice job loving thy neighbor as thyself…..
Here is a thought. Make the banks honor their teaser rates for the duration of the loan fifteen years, thirty years, whatever) for home buyers who put down twenty percent? The more we learn, we see that the Banks played a central role in this mess, AND got bailed out, . (fraudulent signatures on loan papers, knowingly defrauding investors in the sub-prime bundling mess, etc.) while home buyers who played by the rules are left holding the bag with falling home values. It would cost the tax payer a dime, and might even help the banks as home values would stabilize, and normal folks would feel better about their situation.
no way out…no way out…no way out…no way out…no way out…
from The Producers’ Leo Bloom (Gene Wilder)
You can bet that if/when they pull this caper off, the part of the story they won’t talk about today is how they’ll axe the mortgage interest tax deduction as step two. So the end result will be a major ‘victory’ for the Obamatrons in an election year, and a major screwin’ to everyone after the administration is re-elected.
The relatively small number of people who have loans that are not associated with Freddie & Fannie will loose their interest deductions at their (generally) higher interest rates, and the people who’re in on the ‘take’ with Fannie & Freddie loans will get a lot less than they think they’re gonna get.
Gubment wins… everyone else loses at one level or another. It’s the new American way isn’t it?
Regards, ZD
Obama should change his middle name from ‘Hussien’ to ‘Chavez’. A giant vote-buying scheme that’s win-win for everybody! IMMEDIATE fixed costs of $250 billion, no talk of the ongoing costs although $7.1 trillion is mentioned in the article–over ten years of course, so its really a very affordable $710 billion a year. That’s a trillion more or less, the first year. On top of the $1.5 trillion deficit? So while Europe is defaulting and collapsing from vast sovereign debt, when China’s economy is looking like its feeling the global slowdown in a big way, with the oil Arabs feeling insecure as an incompetent president allows the Iranians to nuke up, just where exactly are we going to find enough chumps to finance this ill-conceived mess? The federal reserve…that’s who! They’re going to print money to pay for it which means that you pay when the inflation rate skyrockets, your pension and 401k become effectively worthless and rising interest rates cause payments on the ballooning national debt. How many more of these self-serving schemes are we going to let these social engineers come up with before we realize just how destructive they are? And no need for the legislature to be consulted? Nice. Barak ‘Chavez’ Obama is a greater danger to the survival of this nation as a free society than any foreign opponent has ever been. If you vote to reelect this lawless socialist or any of his Demo running dogs you are part of the problem.
Brilliant strategy by the Obama team. Not only does it seal his re-election, but he helps almost all Americans in the process. A real win-win. Of course, the Republican Party will cry foul. They hate anything that helps real people and hurts the banks and corporations.
I like the fact that a lot of people are commenting that this is a scam yet it was thought of by Mitt Romney!!!
Doesn’t matter who thought of it – government should stay out of business.
ITYS. THIS country, what used to be america, is over. We are only a few elections away from an outright totalitarian take over from the right or the left. It won’t matter. They are the same. But the left will be reponsible for the demise.
suibne
Just another socialist push, take over the mortgage loan business and get control of all housing under big gubment ownership. Prez Zero is and becomes more dangerous by the day for this country, anything to be reelected, legal or not
Wait how is all this stimulus going to be paid?There is no “free lunch” Money doesnt grow on trees! So the libs are only taking money from those who earned it and giving it to those who didnt earn it. In the transfer of wealth from those who earned the wealth to those who didnt there is a “skimming off” of wealth by the government. So the net effect will be a more depressed economy! Those who earned the money will create more wealth but the government will use up wealth and not produce any more wealth.
This is why government managed economies do not perform well.
From Prez Zero’s personal printing press of course, pay no attention to the man behind the curtain
It doesn’t seem like you are reading. First this plan would refi owners who are current. I seriously doubt anyone you can categorize as buying more than they could afford (or just approved for more than they should) is still current on their mortgage. Second this for freddie and fanny, right? As a tax payer you may want to consider letting people refi as that will cost you so much less than if one of these mortgages goes into foreclosure.
I wish they did this two years ago. I had a good job and was current. If I was able to refi to just 4% I might not be in foreclosure now. But they economy tanked, I’m sure you’ll blame who you want to for that, and banks had to be bailed out. If we would have done something like this first it probably would have saved the banks as well.
How about instead of taking from the rich and giving to the poor we just make it a lot harder for the rich to take from the poor in the first place?
Basically what you’re saying is that you don’t understand basic economics and how mortgage refinancing works.
A few comments…
1. What took so long?
2. Moral hazard already left the building with TARP.
3. Obama still has about 100 recess appointments to make if he wants to catchup to the number made by W. Bush. The constitution explicitly states the president can fill vacancies when Congress is in recess. The president should have held a press conference in the empty Senate Chambers when he appointed Cordray.
Bob, isn’t amazing how short the Gopistas’s memory is? Bailouts and recess appointments are typical of the bully-the-Congress-but-save-Wall Street policy conducted by Bush Jr. The deficit went to the roof when W. was the President of the nation and his tax for the wealthy did not improve the economy at all, while financial capitalism was pushing for very tricky morgages that many people trusted, but they do not want to remember. The intellectual dishonesty of the so-called conservative is symply pathological.
And so..This is okay with you then.
Don’t even start with the deficit there, Cat. Bush’s annual deficits were in the neighborhood of $450bn while Obama’s are over $1.2tn. Three times the size!
All we heard from Dems in Congress during Bush’s terms (of which I was not a big fan) was how bad the deficits were. Now, deficits are all GOOD! Yay!!
And no one has gone to bat for Wall Street more than Obama. The stimulus did nothing for middle America and it went straight to the bankers in the US and elsewhere.
Please wake up and realize that BOTH parties are responsible for where we are. The only difference is that the Dems want to drive faster to oblivion than establishment Republicans do.
Lost Cat
Your comment is not only intellectually dishonest, but also factually challenged. Yes, the deficit went up during Bush’s EIGHT years, but Obama will match Bush in only THREE years. The Bush tax cuts were for EVERYBODY, not just “the rich” as liberals charge. Tax cuts DID improve the economy through 2007—-until the LIBERAL policies of “affordable housing” (thanks to Democrats, Fannie and Freddie, FHA, and special thanks to Barney Frank and Chris Dodd). I guess all of that has long disappeared down the liberal memory hole.
3 – The Senate’s in session ie NOT in recess the only caveat necessary for a recess appointment. Also customarily the President doesn’t step foot on the Senate or House floor without an invitation…but if laws don’t matter I suppose customs don’t either.
Bob
Look up the number of “recess” appointments Bush made when the Senate was in pro forma session (as Harry Reid did when Bush was in office). That would be ZERO. The Constitution, law, precedents, and consistency mean NOTHING to Obama and most Democrats. All that matters is the moment and grabbing as much power in the moment as they can get away with.
“Everyone gives a little bit,” said Glenn Hubbard. Including the people who had the good sense not to buy homes they couldn’t afford.
I’m sorry but what are the details behind this statement: “This proposal requires borrowers to give up a share of future appreciation in order to participate”, that’s kind of a big deal. I didn’t see anything about that in the article until the very last paragraph, and alas zero details provided.
That is a big deal! If you acquire an entity which shares your equity, does this not make the Government a co-owner of the house? Ask yourself what THAT would mean??? They would have the ability to yah or nay anything you wanted to do with the house and possibly to force you to do things you do not wish to do with it.
I agree, it is a big deal. That caveat might cause many who would refinance to by-pass the possibility unless they are hugely upside down. In my area too many Florida home owners have lost 35% to 70% of the purchase price/value of their home. I think the idea to share the equity in a future, however, was proposed in a different plan — one idea was to refinance at market value and current rates. If that program was instituted, the new mortgages will have forgiven “debt” in being allowed to refi at the lower rate and at a reduced value. In that case, perhaps the homeowner should not have full benefit of equity gains over time. If there is nothing more involved than lowering interest rates, the mortgage will be on the original amount, a market value that may never be achieved in the borrowers lifetime ….The Obama administration had better have that formula nailed down for those not very upside down. Who knows what future administrations will do to play with and steal from what is most people’s largest investment — the equity built up in their home.
Lots of acronyms were used in the quotes as well — the author should have explained them. All up, not well-written or organized and likely with some mis-information toward the end to “fuel the base”.
All of you anti-American bigoted thugs make me sick. If you could torture and kill all of the Democrats and get away with it you would. Murderous thugs. You don’t care about MY country, you only whine about your crappy lives, clinging to your guns and religion. Go Obama!!
Jan you are the one who sounds bitter! The fact that you want four more years of Obama is your right but to put down the OTHER HALF of this nation that disagrees with you is a bit over-the-top! Sounds like PROZAC time!
oh jan you totally unaware dear….you seem to have Anger issues yourself…oh my!
Go collect your food stamps Jan, this board is for tax paying citizens only. Go away now
oh Jan… You’re too funny!
Forgot the daily prozac did we?
actually, its the far left that has that violent rhetoric and it is the left that would murder. look up(google) Michelle Malkin “The progressive “climate of hate:” An illustrated primer, 2000-2010″
It’s pretty obvious that this will be the end of the private housing market. Banks will never lend a private mortgage ever again if they know that the government has the right to alter them unilaterally. In addition the value of the housing stock will collapse. Its a socialists dream , the end of private property and the destruction of the wealth of the petty bourgeiose!
Banks get free money from the government to lend out at a profit. I don’t think that is a game they will want to stop playing.
You clearly do not know what a GSE mortgage is. These mortgages are no longer even owned by the banks, they simply service them (e.g., collect payments, send statements).
Lending is too lucrative a business for banks not to participate, this will have no impact on their lending practices.
First
These are good news! After three years of being cowed by Gop-bullies, it is about time that President Obama begins to show some real leadership, instead of playing the cool bi-partisan nice guy ready to get another kick on the teeth.
I hope it will be, as old Chinese people say, an interesting year. Happy new 2012 to you.
im a dem who despises obama…everything he does is for his own benefit and this is just a ploy to win reelection.
he has been a total failure.
Define Total? By any objective standard Obama have done some things right..
I am not objective my self.
I think he has be great!!!
From the article cited at bottom, containing the link that took me here, it states:
The speculation was fueled by reports that suggested the White House may be preparing a new trillion-dollar plan to refinance home loans. However, administration officials told CNBC’s Dana Olick that they are not considering a $1 trillion refinancing program.
My question: If not considering a $1 trillion program, maybe they’re considering a $2 or $3 TRILLION plan? What’s an extra trillion or two here or there?
A noteworthy comment at end of that article:
againstidiocy | Jan 6, 2012 01:55 AM ET
UNDERWATER HOMEOWNERS DO NOT WANT LOWER INTEREST RATES! they want a handout for principal reduction!
and I say give homeowners in good standing with no late payments the principal reduction…throw good money after good, not good money after bad…
only makes sense…
Mortgage Refinancing Plan Would Harm Banks: Dick Bove
Published: Thursday, 5 Jan 2012 | 8:45 PM ET
By: Michelle Fox, Producer
Questions? Comments, send your emails to: lkudlow@kudlow.com
© 2011 CNBC, Inc. All Rights Reserved
I think the whole scheme is much more complex… http://www.thecactusland.com/2009/11/what-qe3-will-look-like.html
What a paradox. One and half years ago I tried to refinace on a duplex that I had built in 2006. The local bank approved me for their loan at 6.75%, with FICO score of 805, appraised at 40k over my cost to build, was always on time with my monthly mortgage payments, then loan through the great Freddie Mac was packaged and sold to Washington Mutual (bankrupt),then to JPMorgan Chase. Chase personnel in Ohio and Arizona verbally approved my refinace at 5.75%, with FICO score of 815, then via a letter (generic) was told that my FICO score was too poor, my income was too inadequate(they could not verify or rather would not accept any farrm income, and that the appraiser they hired (which I had to pay up front) thought that my rents were way to high. After contacting ABC, CBS, NBC to see if they would like to look into this scam, they gave me the polite brush off. Still I have always been on time with my payments, my FICO score is 803; and guess what? Chase sends me a letter every month saying how great a risk I am and to take advantage of the the GREAT HARP Plan. Verbally I have been approved but I sense the run around is again just beginning.
It’s not your money.
Big government knows no bounds to stupidity. Just wait until Obamacare kicks in full force if you want to see boondoggles!
BE CAREFUL, HARP will ruin your credit. They report your payment as late for the time period that you are making your trial period payments because they are not the full amount of your regular payment. Then if they don’t approve you into the program, you owe late charges and penalties. Meanwhile you are reported as not paying your mortgage payment for 3-6 months.
As for future purchases, HARP is looked at like a short sale on your credit report, so you will not be able to purchase a home again for 3-5 years. It is a slippery slope once you enter the process.
Please make sure to ask your lender about my comments, it is something they forget to tell you up front. I am a real estate agent and have had sever clients pushed into the pre-foreclosure process because after they were denied for HARP, they couldn’t make up the penalties and back interest payments. Please be careful.
“This proposal requires borrowers to give up a share of future appreciation” What does this mean? If the value of the house goes up the homeowner has to pay points? How is this a savings?
If the borrowers have to give up a share of appreciation, in effect the Government through the GSE’s is becoming a part owner of the property.
Not unreasonable, IMO, if we do this. OTOH, it is a fundamental change in the US. I guess GM was such a change.
Beware the Law of Unintended Consequences. This one smells to me as if it has some doozys.
The scariest thing about this sort of criminal behavior on the part of a sitting president, is that there are probably thousands of idiots who would vote for Obama and take advantage of this opportunity without the least care for the moral, ethical, and financial ramifications. Why should anyone who doesn’t pay federal income tax or hasn’t served in the military be able to vote? If you don’t have skin in the game, you’re just a parasite out for yourself. CEOs are greedy? They’re nothing compared to Libtards.
I agree….orginally when this nation started only Landowers/property could vote.
And slaves only counted as 2/5ths of a person
Are you on crack?
Oh how we miss the good old days
I really can’t stand the phrase “skin in the game.” Yuk.
I’ll take advantage of the benefit and will use the money I save to help Republicans get elected.
So democrats offer help to you and your family and you gladly accept it… Then you use it to get rid of the people who helped you and to elect people who will do everything they can to screw you over. That pretty much sums up republicans. Thanks for at least admitting it!
Tell ya what holly, why don;t you look in your pocket and pull out the cash and just send me half of it- right now –
if you say hell no, then refi and shut up
Really Holly? That sums up all Republicans? I’m so tired of all the people that just want to sum up the world in 2 words – Democrat or Republican. We all have a million different views on a million different topics, and only the simpletons and charletans want to lump us all into one category. Use your brain and think instead of blaming half the people in the country and calling them bad people. There’s good and bad on both sides, what we need is more moderates and people with positive input, instead of a bunch of people bitching like this.
This is the truth. I could give a damn a out republican or de
, I want my children to not carry the burden of the complete and utter failure of the congress and Obama. Common sense has left the buildings and it’s a free for all except the people in this country who work, at least the ones who still have a job, and pay their taxes and bills.
Stop the finger pointing, the lies and for once somebody please tell us your platform for the white house and congressional jobs! Moreover if you get the job, do your job. Don’t just use the perks and power to screw us and future generations.
There are two type of republicans, those for who God come before money (good trait i might add, God bless them), and those for who money come before every thing else. The funny part is 99% are the former, and most off the time they don’t realise that the other 1% is using that blind spot against them and laughing all the way to the bank.
Holly
Take off your ideological hat for one second and you might have read this isn’t an Obama idea, it is from Glenn Hubbard, a Romney advisor. Now I’m not a big Romney fan, but come on. For all we know, Obama wants to get to the idea before his likely 2012 competitor has a chance to.
While it sounds just dandy to wipe away debt, that is just too simple. Someone pays the costs. When the economy is run purely from a political standpoint we are doomed, folks. Neither the R’s or the D’s give one damn about you or I. THey want to maintain their power, and that is all. THey even like crisis as opposed to trying to avoid them. It makes people dependent which means votes. Wake up, please. Read a little history -financial history and you’ll see.
The point of the article is that Obama may once again circumvent Congress to appoint yet another czar to do a program soley for political gain, effect on the country be damned.
The Senate was not in recess when Barrack Huessein Obama made the Cordray “recess appointment”.
This really has to do with only one thing. Obama’s re-election and the continued ” fundamental transformation” of America. There are no good guys in the White House.
And if the GOP was smart they would throw together a bill and beat Obama to the gate.
The GOP can throw together any bill they want, they can put together 300 bills on this, that A** clown Harry Reid is just going to table them just like he has the rest
You are correct……….IF the GOP were smart!
They have some really good ideas and plans but nobody is out there talking about them.
They passed a budget in the House but nobody tried to sell it to the public.
They passed the balanced budget amendment but didn’t sell it to the public.
You are correct though, they need to get ahead of this thing. Why hasn’t Romney announced the plan that his advisor developed?
I have to say I did take few minutes to listen to Rush talk about this today. I am a real estate agent and a home owner. I do not like Obama at all. What I actually heard was that a person/family who couldn’t in the past for whatever reason would now be able to refinance their home at a 4.2% rate IF they had 3 months of on time payments. This is with only Government backed loans (I believe). A part of me likes this and a part of me knows that this is another and last ditch effort ploy to win the vote come November. I like it for me/my family because of this: I do not owe more than my home is worth. We purchased our home in 02. It was a foreclosure. We never took out any kind of home equity loans, etc. which can actually KILL you in the long run when selling your home (I have seen people bring $20,000 to closing when they were selling their home). Our percentage rate is at 7%. We never refinanced because we did get a bit behind in our bills (not our house payments) and our credit score was not where we wanted it or needed it to be in order to qualify for the great rates. We have many, many friends in the same boat. BUT….there is the BUT….how is he going to make this happen. SOMEONE has to pay to have these refinances. Before spending the TRILLIONS that he has, he should have done this first…WITH A PLAN and not try to rush it through with a boat load of other BS mixed in. THIS probably would have stimulated the economy before many other things he put in place. Heck, if someone told you your mortgage payments were going to be $300 (or more) less than what it is now, would you pass it up? Not me. This is just my opinion. I really do need to look into this more (and I will) to get all the facts. Most likely, this is just a bunch of nonsense talk that will fizzle out in time.
You are a real estate agent? The idea is to reduce the rate without doing anything other than add a new interest rate. No refi charges, no appraisals, very little time spent. I think the banks can afford to have their $9 per hour employees spend a little time on a keyboard after all the billions they have stolen or be given by the government with our tax dollars. If you want to learn something, why listen to right-wrong talk radio?
Wow!!! Talk about the potential for fraud!!! I love it! Screw those who make good decisions and reward those who don’t. What they didn’t add into the analysis is how much of that $350 dollar a month savings would actually end up in the economy. First off, most people who are highly indebted in their homes, also have car payments and credit card payments to boot, so people aren’t just going to go hog wild and spend it all every month. One of the biggest problems with the economic recovery that most economists don’t tell you is that debt in America is near its allt-time high and personal income is declining. Statisitcally, most of this Christmas seasons buying was done on credit, so my guess is, less than half of that savings is going to go back into the economy which should be around $50 billion, not what the $100 billion suggested. In a $15 trillion economy, that’s a drop in the bucket, but if you’re an idiot and running for re-election, it’s great PR.
“Screw those who make good decisions and reward those who don’t”
Like the banks that offered mortgages they knew couldn’t be paid back? Or the financial industry who bundled and sold these crappy mortgages to anyone with an extra buck?
your name says it all
This looks like a classic Pump & Dump scheme:)
Rates are almost 0 now. The only way a homeowner saves $ 355 a month is if they have less than 10 years left now andthen refi an strecth it out to 30 years…foolish, but a win for the banks either way. They make it on the front and back and the tax payer gets taken to the cleaners:(
Time to put the short out is what I’m read’in here?
Chris -
Crunch the numbers on a $300,000 mortgage with a rate over 6% and 20 years to go, and you see how dropping that rate to 4.2% can save that much. And give me a break with the “the banks win either way” crap. I’m so tired of a bunch of whiners blaming banks for everything. This is a redistibution of wealth by making taxpayers (the wealthy) fund a bail-out for overextended borrowers (the not-so-wealthy).
I am 100% disapproval on B.O.,
I am offended by much of his actions and statements.
However, if he pulls some more of his
Stalinistic marxist tricks and manages to
Save me $350 a month quite simply, I
Can’t afford to pass it up. I’ll take the savings and
Use it to invest in my family. Heck, I might
Even buy a new big gas guzzling truck
George is on to something — with those kinds of savings most people will buy something — a more fuel efficient car would be a great choice. And on and on the savings roll. Whoda thunk it, Obama-haters?! Economic Recovery with nothing more than a few keystrokes from an underpaid bank employee….and 30 millions people have enough money in their pockets to buy a new car, or an investment property in certain areas of the country, or a boat, lawnmower, repair/replace a roof, get more energy-efficient windows -=- anything but put more money in the pockets of people who already have more money than they can spend in a lifetime. The banks DO need to reduce rates if only to repay some of what they have stolen from millions of Americans over the past 8 eight years.