Going around CongressPosted: October 24, 2011 Filed under: Barack Obama | Tags: executive orders, mortgage refinancing, student loan debt, underwater mortgages 13 Comments
It has been clear from the very beginning of the Obama administration that Republicans were out to make him a one term president and to tank just about any initiative he could possibly make. It has amazed me that the President sought middle ground with folks that had pre-announced their intention to find none. I could never figure out why executive orders were not flying out of the White House from the get go. It seems that re-election prospects and the economy are now registering as bleak enough to justify that strategy.
In a few short minutes, President Obama will announce a series of executive branch orders that will deal with refinancing mortgages and student loans. He’s in Las Vegas today which is undoubtedly home to the worst of the housing crisis. The major problem recently has been with underwater mortgages. The new loans will require no appraisal, no credit check, and you will not have have to be 90 days delinquent. You can miss only one payment to qualify. Evidently the new strategy is to move instead of wait for lawmakers.
According to an administration official, Mr. Obama will kick off his new offensive in Las Vegas, ground zero of the housing bust, by promoting new rules for federally guaranteed mortgages so that more homeowners, those with little or no equity in their homes, can refinance and avert foreclosure.
Interesting enough, I just was in Denver discussing a Philadelphia Fed study that showed how the current refinancing programs were actually encouraging default on primary mortgages. Hopefully, this will reduce the time period between experiencing financial stress and getting relief for many home owners.
And Wednesday in Denver, the official said, Mr. Obama will announce policy changes to ease college graduates’ repayment of federal loans, seeking to alleviate the financial concerns of students considering college at a time when states are raising tuition.
The president’s announcements will bookend a three-day Western trip during which he also will hold fund-raising events in the two cities — both Nevada and Colorado are election battlegrounds — as well as in Los Angeles and San Francisco.
The “We can’t wait” campaign is a new phase in Mr. Obama’s so-far unsuccessful effort — punctuated until now by his cries of “Pass this bill!” on the stump — to pressure Republicans to support the job creation package he proposed after Labor Day. It comes after unanimous votes by Senate Republicans in the past week to block the plan; House Republican leaders have refused to put the measure to a vote.
There are two possible ways this can help. First, it may keep homes from going to foreclosure and being placed on the market. This could possibly slow down the price decline in the market which would stop forcing home values into the underwater condition. Second, lower mortgage payments could keep people their homes and free up some income for other expenditures. The details of the student loan plan have not been announced yet but the President will be talking about it in Denver on Wednesday. Let’s hope some of this works. Better late than never.
Would be nice to see someone actually try to help for a change! Hope he keeps at it.
But will it have teeth? The only way banks are going to do this is if they are forced to.
As always, the devil will be in the details. I will have to see those.
@ BB 2:24
I don’t trust the program at all, from what I’ve read. First, it’s voluntary by the banks. Second, you have to be current on your mortgage.
To me, this simply means: banks will say you have to make your mortgage obligation current for them to consider a modification and then, once they pocket the money you’ve managed to scrape together to get current, they’ll turn you down. But wait, there’s more. Before they turn you down, they’ll keep you on tenterhooks for months or years while they “process” your application, during which time you must continue to pay a mortgage you cannot afford. All simply a way for the bankstas to squeeze the last penny out of us that they can before they foreclose. (Oh, and maybe they’ll throw a few bucks Obama’s way as thanks for getting them some extra income – without their doing a goddam thing.)
It’s a typical Obama con. It does nothing for the millions who cannot scrape together the funds to get current (lucky for them) and it does nothing for the thousands who make their payments current but are turned down anyway.
You know, fool me once . . . though I wasn’t even fooled once. Do not trust a thing this lying sack says – ever. You really can’t go wrong with that approach.
HONK! Kudos, mjames! Voluntary programs granted to banks have a history of failure. And what do the banks get out of this deal? An open subsidy from the taxpayers? Furthermore, will there be transparency with this program? Since it comes from Bumbles, I don’t trust it.
I don’t trust it either. That I’d why I am waiting for more details.
I think that I can speak for all lurkers, posters, frontpagers and other regular visitors when I say that we are all EAGERLY awaiting your analysis, Doc…. 🙂
I understand – and I will certainly appreciate your analysis.
With Obama, my rule of thumb is: if it helps the banks, he’ll do it. Anyone else, not so much. In fact, nothing.
Exactly Mjames. They keep having my mother submit applications and recopy all the documents. She has done it 4 times for Bank of America and twice for FannieMae. I bet they get funding per application…and since they are not forced into making the modifications, they don’t.
“Better late than never.”
Yeah, I guess. But I have the nagging feeling it’s only real purpose is in the re-election campaign. Big 0 is not stupid. He knows he could have done this Jan 2009. But then it would have just helped homeowners, and not him.
I can’t make up my mind whether there’s still some kind of cosmic credit if you do some good, but only because you’re using taxpayers to fund your campaign.
Oh my, it looks like it’s worse than I thought. Under this refinancing program, instead of Freddie and Fannie handing off the losses to the crooked banks that originated the mortgages when the consumer defaults (the current set-up), Freddie and Fannie (that’s us, the taxpayers) will now take the full loss if there is another default. That’s right. The banks, the real wrongdoers, once again get full immunity from astronomical damages (and jail). This is all designed to give the banks a free pass for the original fraudulent mortgages. Because they’ll all go under if they’re held accountable. So, Susie and Joe will go under – again – but not Jamie and Lloyd.
I have to go puke. Obama is selling this as a help to the mortgagee? This is beyond con. It’s into downright malfeasance. Corrupt puppet par excellence.
Sounds like the government is their partner in crime. Reminds me of an archaic (“archaic”) definition of civilization – the act of making a criminal process civil.