Home / Blogs / Sharyn's blog
Visitors' civil comments encouraged.
BHO Foreclosure Plan
some observations:
First of all, Obama's plan is just more big money for the banks: 75 billion going to banks as an incentive to renegotiate mortgages. So once again, a bailout is going to banks, not the homeowners and not the struggling tax-paying citizens.
Second, only homeowners with fannie or freddie mortgages, or with mortgages from lenders who got all that money in the last bailout, can participate. (other homeowners and banks get no "help")
Third, the corporate media spin on this makes it sound like the government/taxpayers will be paying off mortgages for people -- which is upsetting a lot of people who are paying their mortgages (falling for this corporate spin/lie): "hey, how come the government won't pay off some of my mortgage too?" they ask. None of this money, however, goes to the homeowners' mortgage principle; it's going to banks to "bribe" them into re-negotiating the mortgage interest rate to a lower, more reasonable and affordable rate. The banks are still making money on these mortgage loans.
In other words, this whole thing is just another "win/win" for banks. They get billions of incentive dollars; don't lose money by homes going through foreclosure, and, in fact, are still making money through the interest on those loans.
- Sharyn's blog
- Login or register to post comments
-
That mortgage bailout thing has been hard to fathom but this helps a lot to simplify what's really going on. It sounds like what we're doing is subsidizing lower cost loans by paying the difference between the old and new rates. The money is really being borrowed from China and other countries and we, the taxpayers, have to pay back all the principle and interest. The cost is also going to come at the expense of the defense budget, Social Security and Medicare.
Rick Santelli has more to say about this foreclosure plan and Gibbs' attack:
has the truth on his side.
"75 billion going to banks as an incentive to renegotiate mortgages." It throws money at the banks, asks them politely to please consider renegotiating people's mortgages. But nowhere does it require them to renegotiate mortgages.
So yes, taxpayers are PREEMPTIVELY subsidizing the difference between the older, higher-rate mortgage and the neweer, lower-rate mortgage IF THE BANKS RENEGOTIATE THE MORTGAGES.
But how are banks going to renegotiate? The mortgages have been bundled up into these mortgage-baced securities. Mortgages are sliced and diced into thousands of pieces.
It looks to me like this plan throws money at banks, hoping that will encourage them to do something they probably can't even do.
Meanwhile, people out there with good credit can't get loans to buy homes. My parents live in a large country club spread and not a single home has sold since September. Their relator friend said she's found buyers with good credit, but they can't get loans.
instead of throwing 75 billion (our money) to certain select banks in the hope they'll renegotiate the high interest rates, why not keep our 75 billion and mandate the banks renegotiate and if they don't penalize them. banks need some tough love.
Totally agree, Sharyn. It's disgusting. How - and who - let them get away with operating like this?
Also, I've wondered for decades why, in this country, a system was set-up whereby the homeowner ends of paying for his house 3 times over because of the bank interest structure.
are paying more than three times over what their student loans were; it's disgusting. and student loan debt is even worse than a mortgage debt because you are never allowed to re-consolidate at lower rates. your first consolidation rate is what you're stuck with forever -- if it was 15% the year you consolidated and 10 years later it's down to 5% for the ones who luck out and consolidate in a low rate -- well that's just too bad for you.
personally, i think the student loan system has been so poorly structured and managed, that we should have blanket forgiveness at this point. some grads are paying 10 times what they borrowed -- and will be paying it off the rest of their lives.
But how are banks going to renegotiate? The mortgages have been bundled up into these mortgage-baced securities. Mortgages are sliced and diced into thousands of pieces.
How did this happen? and why was it allowed?
you are so right, and the Dems are throwing money at the Fannie and Freddie mortgages, because they were the ones who pushed for banks to offer these mortgages to low income people and many of those mortgages are now in foreclosure. They are throwing money at them thinking that will make there failed idea work. It won't. Truth is what was needed was affordable housing. They should have thrown money at Habitat for America.
Right on, BJ! And they still should allocate money to affordable housing.
with a high interest rate to moderate; have them all be in the 4-6% range. ironically the poorer you are, the higher your rate is. rich people can afford more -- why not give them the high rates?
75 billion going to banks as an incentive to renegotiate mortgages. So once again, a bailout is going to banks, not the homeowners
Wasn't this what the FIRST "Emergency" $350 billion bail-out under Bush was supposed to do?