Spendulus Alert: $50 billion for “mandatory mortgage modifications”
I uploaded the entire Sellout Substitute Amendment championed by the Turncoat Caucus this weekend. Did you read through to the very end of the 778-page legislative text? Did your Senator? If you did, then you saw this:
SEC. 7001. MANDATORY LOAN MODIFICATIONS.
Section 109(a) of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5219) is amended—
(1) by striking the last sentence;
(2) by striking ‘‘To the extent’’ and inserting
the following:
‘‘(1) IN GENERAL.—To the extent’’; and
(3) by adding at the end the following:
‘‘(2) LOAN MODIFICATIONS REQUIRED.—
‘‘(A) IN GENERAL.—In addition to actions required under paragraph (1), the Secretary shall, not later than 15 days after the date of enactment of this paragraph, develop and implement a plan to facilitate loan modifications to prevent avoidable mortgage loan foreclosures.
‘‘(B) FUNDING.—Of amounts made available under section 115 and not otherwise obligated, not less than $50,000,000,000, shall be made available to the Secretary for purposes of carrying out the mortgage loan modification plan required to be developed and implemented under this paragraph.
‘‘(C) CRITERIA.—The loan modification plan required by this paragraph may incorporate the use of—
768
‘‘(i) loan guarantees and credit enhancements;
‘‘(ii) the reduction of loan principal amounts and interest rates;
‘‘(iii) extension of mortgage loan
terms; and
‘‘(iv) any other similar mechanisms or combinations thereof, as determined appropriate by the Secretary.
Yes, you read that correctly. $50 billion more of your money made available to tax cheat/bailout failout architect Treasury Secretary Tim Geithner to force banks to do loan modifications with homeowners deep under water on their mortgages. That’s in addition to the $20 billion already allocated by the House last month for the same purposes.
Banks have been engaged in these “mo mod” programs over the past year. The Democrats want to accelerate the pace and use the power of government to essentially provide a blanket amnesty for borrowers and lenders who made bad financial decisions. Yes, I know there are many responsible borrowers out there having trouble negotiating loan modifications. I’ve heard from some of you. But this $50 billion giveaway to the banks — the brainchild of unscrupulous borrower Chris Dodd – is exactly the wrong way to go.
As I’ve said before: If you give bad loan risks more money, you will get the same result.
This massive expansion of government meddling in the housing market — yet another attempt to get federal bureaucrats in the business of reducing principal — will just delay the inevitable:
The big question looming over the push to rewrite the home loans of people struggling to make payments is whether or not such mortgage modifications keep folks in their houses for the long term. As I’ve mentioned before, there’s a danger that loan modifications, at least the way they’re currently done, don’t solve the problem, just delay it.
This morning Comptroller of the Currency John Dugan gave a speech and shared some grim data: more than half of loans modified in the first quarter of 2008 fell 30 days delinquent within six months…The data come from the largest national banks and thrifts and cover 35 million loans worth more than $6.1 trillion, or 60% of all first mortgages in the U.S.
Dugan called the results, part of his agency’s new Mortgage Metrics report, “somewhat surprising, and not in a good way.” He pointed out that a person could argue that 60-day delinquencies are a better indication of future foreclosure, but those figures aren’t so good either—after six months, 35% of people were 60 or more days behind on their payments.
As I’ve said before: The refusal of the GOP to stand squarely against the mortgage entitlement mentality is paving the way for these measures.
Where’s the fairness in forcing prudent homeowners and renters to subsidize people who bought overpriced houses and the banks who lent to them?!
Repeat after me: Housing is not an entitlement. Credit is not an entitlement. Stop artificially propping up the housing market.
No self-respecting Republican senator who claims to stand for fiscal conservatism and free-market principles can support this abomination.
***
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They are just determined to keep illegal aliens in their comfy homes, aren’t they?
This is esentualy paying down your mortgage.
Better get a second mortgage before congress passes this so they can pay it for me.
Please remind me again why I go to work every day, pay taxes, pay my mortgage, and pay off my credit card.
‘Course, if I had a mirror handy to see the big “C” (for chump) on my forehead, I could remind myself….
I’m at my wits end with this Congress, and it’s less than 30 days in.
In addition to having to subsidize this nonsense, they’ve made it impossible for me refinance my own loan. In trying to act financially responsible I have now been screwed twice.
Fiscally speaking, I would be better off not paying my mortgage for a while and having the government force the bank into renegotiating the loan.
What kind of message is being sent when stupidity is rewarded and prudence is punished?
my god, how did we ever get to this position. i do believe the washington group won’t listen to the people until there is rioting in the streets. they see us as the passive sheep lining up to get clipped every april 15 so they can be the big shots they think they are by spending opm. all hat, no cattle.
I guess the key words here are “self-respecting Republican”.
Stay tuned.
Not only is housing not an entitlement, neither is health care, car loans, food stamps, welfare, illegal alien give outs…. God, the list is endless.
What? Credit isn’t a Civil Right?
Wasn’t it Patrick Henry who said “Give me a Government Subsidized, Low Interest, Zero Point Mortgage, or give me Choice!”
Boy, I sure hope all of these “mods” are given to non-US Citizens’s too. That would be great…
well call me stupid i just paid off my credit card debt paid off my student loan in full and bought my house in full.
I dont want the gov help , i don’t need their hand outs . they can take this bill and shove is where the sun don’t shine, but i am afraid there isn’t any room since it seems that’s where they like to shove there heads.
if they cut the capital gains tax i would be investing , instead i am buying gold and silver and hording it .
The end is near and im stocking up for the next civil war that is coming.
The cheapest way to solve this problem is to deal with the culprit, underwater loans. Now in a perfect world they would put a lien on the house for the amount of the loan that is reduced. Here is a good read on the other point of view:
http://hussmanfunds.com/wmc/wmc090209.htm
So, am I supposed to keep paying on my mortage, or default and try and get some of my money back via a bailout structure? Why should I try and retain any integrity whatsoever?
I believe that somewhere around 2/3 of all mortgages which have been restructured in the last 10 months have resulted in foreclosure. So, lets quit tossing good money after bad.
Here is an idea: Allow all American’s access to 100% of their IRA’s/401k penatly free and tax free for one year, if the money is used to pay down/pay off/ or buy a home. Problem solved.
The cycle of bad lending and bad borrowing will continue. Those who will not benefit from this legislation are the ones who’ll get stuck with the tab.
Ugh.
There, fixed it so lgm doesn’t need to post.
The BHO townhall in Elkart Indiana is turning out to be an exercise in the President trying to have every situation acceptable every possible way.
GAG!
David
Invest in stable commodities–such as bricks of ammunition.
What?! Please tell me, why is my responsible family busting our humps to make sure our mortgage gets paid every month? People are actually just going to get out of paying money, free and clear?!
I intend to sound like a broken record here and elsewhere – I’ve been re-reading Atlas Shrugged (about 2/3s through ), and as a roadmap to the world we’re heading towards, it is a highly recommended read at this point in time.
One quick glance at Graham will put “self-respecting” to bed. I seriously doubt any of them could even give a Wiki version of “free-market principles” and here they are throwing our money away.
What would be the point of smply handing ACORN 4+ billion for salaries without giving them some money to help ‘spread the wealth’?
‘Change we can Believe in!’
Looks like I’m stuck with that second house in Jacksonville. Trapped in a bridge loan from hell. I won’t be able to sell it until long after I’m dead and gone, if ever. This is truly an Alice’s Wonderland.
America apparently has been defeated not by armed communists from abroad but rather Gucci-heeled communists who got themselves elected to our own government. Wow, who wouldda thunk it? The perfect plan.
This bill represents Billions upon Billions of dollars in
REPARATIONS
How did you think Obama was going to “spread the wealth around”?
How did you think he was going to “change it, rearrange it”?
The only thing this bill “stimulates” is the Democrat[ic Socialist Communist] Party.
I sure would Arizona, but possesion of un-code ammo will be outlawed soon
Loan refinancing and modification should be left up to the banks to decide, not the government.
The banks created the mess they’re in, it’s time for them to clean it up themselves. Idiots.
On February 9th, 2009 at 1:03 pm, RedDog said:
Who wouldda thunk it?
Senator Joe McCarthy.
He warned us, but his warning was no longer heeded as time went by.
But he was right, not wrong.
If they’re going to cramdown mortgages, wouldn’t it be simpler and fairer to make an across-the-board cut in everybody’s primary mortgage? Just order the principal of every mortgage cut to 50% of current value and order all mortgage rates equalized to 4%. It would be just as horrific as what they are proposing now, but at least it would be fairer because prudent borrowers would receive some benefit, too. And it would free up a lot of capital.
Meanwhile, Obamunism fails again:Venezuela. Chavez financed his “Stimulus” with billions in oil revenue, and still failed. Now, his economy is in freefall.
Government spending does not lead to prosperity, except for a few Chicago-style insiders and owners of companies that get a direct cut. If lavishing Federal spending on an economy worked, West Virginia would be the wealthiest state in the union.
Michelle, this reads to me that banks, including TARP receptive banks will be guaranteed payment by the gov for any loans they rewrite or renegotiate.
Forgive me but doesn’t this really mean more money thrown at homeowners that in some cases had no business owning a home in the first place?
I’m sick over this imminent transformation into a welfare state.
There are two groups that want to bring this country to its knees:
1) Islamic Jihadists
2) Democratic Socialist Communists
I believe that both groups (not just the first) were involved in the 9/11/2001 attacks.
Socky,
Chavez’s Venezuela: Obama and Ayers
Socialism, Marxism, Communism & Obama
This is going to be the Godzilla of a “Jimmy Carter” economy. And I just wonder what forms of blame the communists will throw on conservatives and libertarians as this thing called the US economy slowly and inexorably slides into the cesspool.
We need constitutional amendments for a balanced budget and a fair/flat tax. Communists ans socialists would have a hard time navigating that.
If we hit hyper inflation you can pay it off in a couple of paychecks. Savings, retirement gone, SS finally tanks, interest will dry up and banks will fail.
Work all day for a loaf of bread, but do not touch the perfume or oil. Remember Jimmy Carter, 21% interest and gas lines? Wear your woollies. Trust in your God and yourself RedDog .
When the mob gets hungry and mad remember:
—
That every man be armed–you too ladies.
On February 9th, 2009 at 1:11 pm, FireBlogger said:
I’m often tempted to feel the same way.
Here’s what comforts me in the midst of this Communist insanity:
Because when the pendulum swings the other way, as it always does, men of principle will be the success stories of tomorrow.
Or it could be so you can afford to stock up on food and ammo before CWII.
Thank you, ITTRP. I needed that.
I expect Wells Fargo, Bank of America and Citibank to collapse this year. The amount of toxic junk paper and bad mortgages on their books is overwhelming and no amount of bailout will save them.
Throwing good money after bad.
177-0
Where are the various small-government think tanks here? Why haven’t National Taxpayers Union, Citizens Against Government Waste, Taxpayers for Common Sense et al. combined efforts for a massive public education campaign? Now that the Obamessiah has hit the road to rally the idiotic faithful, the right needs to do so as well with commercials exposing the fallacies behind and the waste embedded in this bill.
All it’s doing is throwing additional fuel on the same idiotic sub-prime loan fire that started with Jimmy Carter and was pushed by Frank and Dodd and the “executives” at Fanny Mae and Freddie Mac.
It’s going to prevent the market from adjusting home prices to the levels they need to get back to from the false inflationary bubble of 2006.
Many of these people couldn’t make the payments then and won’t be able to now. Sure, many purchased homes when the market peaked and were left holding the bag when it tanked. That’s a risk you take when you buy a home – especially if the intent is to flip them.
How about the 10s of thousands of dollars many have in credit card debt – following the Dems logic someone should have to bail these people out too? I mean, to paraphrase Wimpy from Popeye, isn’t everyone entitled to enjoy the luxuries and wants of today and gladly pay for them on Tuesday?
Excellent!!
For my Popeye paraphrase (?quote?), and I think I may speak for lots of us here, “That’s all I can stands, ’cause I can’t stands no more!”
Isn’t this the entire point of the Porkulus package?
Nothing is going to get better until they get rid of mark-to market–which is a huge part of the problem. Remember that it is in the first $700 bill bailout, but only if the Sec’y of Treas wants to do it. Time to demand the change NOW. Half of the pork could disappear quickly if mark-to-market is dropped.
Michelle – I have tried and tried to click the petition link and I keep getting the 404 page error. I also tried handtyping nostimulus.com into my browser and got the same thing.
Maybe they’re just overloaded right now.
three hundred million people, fifty billion. So they want to reduce my principle by $166. How very nice of “them”
NOT.
Please note – I don’t think there is a single member in either the US House, US Senate, or WH that I voted for. Who elected these idiots?
IF that pendulum ever does swing I hope a few RINOs are the weight.
I’m sorry – mark to market did not cause this mess.
FDR, (and others before him), Greenspan (and others) and Congress caused this mess.
It’s what happens when we let lawyers run things.
Lawyers generally are not experts in things such as history, economics, biology, morals or engineering but yet they make laws every day affecting all of these things.
Socky – your idea is only fair to the borrower. NOT FAIR at all to the prudent lender – a category which includes most small banks. Of course, the small banks are located in smaller towns (probably) which tend not to vote D – so who cares about them.
At least this mortgage ‘bailout’ is more of the same crap we already tasted but THIS is in the bill and is FAR FAR WORSE!!!
I hope Michelle will jump on it – Rush already is and it should be just cause to start marching on DC. They want to take away your right to get whatever health care your doctor wants for you – and it is in this so called ‘stimulus’ bill!
STIMULATE THIS OBAMA!!
Dances – We should all contact AARP with that information and they’d raise holy heck.
There ya go elderly, the Dems are lookin’ out for you! Not!
AARP? They supported Tom Dashound, Daschle, whatever. In Uncle Toms book Critical: What We Can Do About the Health-Care Crisis his Federal Health Board would deny expensive health treatments to the elderly, chronically ill and such.
“Old People should learn to live with their infirmities-accept..”
Canadians with an Uncle Tom type health board come to America in the hundreds of thousands for cataract treatment, joint replacements and problem pregnancies. Healthy people do alright under such plans, just do not get sick.
Are you hearing the ads to put your health records online via Medicare? Perhaps their protocol is 666.
AARP? Basically a Democratic Party organ.
From Dances #49 link:
Hmmmm… why again does b. hussein want to rush this through? Job losses? Or more likely so no one has time to see all this CRAP that’s in it.
No surprise to us!
I know AARP is a Dem ‘organ’ but I doubt they’d let this pass. And they have a lot of power.
This is bad, but what is worse, MM, is the 4.5 Billion going to ACORN! And I haven’t read all of it, but I’ve heard all the jobs for these so-called infrastructure requires that they be UNION positions! This whole bill is nothing more than a pay off to BO’s supporters! The reason most of it won’t be spent until 2010 & 2011 is so that they can use the monies toward getting themselves re-elected! The whole thing is disgusting, and BO is lying through his teeth!
“credit enhancement” Isn’t that what got us into this mess in the first place?
I do hope you are correct, I’ll be 62 this year–I do fear these people.
–
That everyman be armed-you too Joy.
Surely priority should be given to helping credit worthy borrowers buy houses, not to helping credit unworthy ones stay in them.
AARP?
Ummm…no, I don’t think so.
Yup.
They want socialized medicne.
The reason why I did not renew membership after I foolishly had signed on a few years ago.
Yup, again.
Reminds me of the Monty Python skit where the bewildered policy holder goes to make a claim, and is told by the insurance representative something like, “I’m sorry sir, but you had purchased our no-payout policy.”
On the contrary, of course they’d “let this pass”.
Ideological loyalty and discipline trump all.
Why do you think feminists did not criticize, but rather supported and defended, the unspeakable inhabitant of the Oval Office from 1993-2001?
Arizona – Not to worry. At the first sign of trouble many of us in my little town are moving to Church members home who is stocked with food, clothing, water, generators, solar, a mini hospital and tons of guns and ammo. Oh, and he’s a retired Full Bird Colonel.
Also, I learned to shoot when I was 8 in the deserts around Phoenix, where I was born and raised. I now live in the People’s Republic of Kalifornia but I don’t expect much trouble here because our town is actually conservative even though we’re on the coast. We’re pretty much removed from any large cities.
But we’re ready.
Say hi to a cactus for me.
I have 2 hard-working brothers – one’s a concrete finisher, the other is a welder. Neither belong to unions. The jobs are drying up right now; one brother was just laid off, the other expects to be within the next 3-4 months. This crap-tastic plan will not help them, since they didn’t help line Obami’s election coffers.
Socky…What is the book of Helaman? It sounds like it’s from the Bible, but I have never head of it.
It’s not from the Bible.
It’s from the Mormons’ books.
Im closing on a brand new house this week. Its been built for almost two years and they are still building as fast as they can build all around the property.
If this stimulus package passes, I may just not ever make a mortgage payment and let Obama buy this place for me…. hey no hablo ingles.
?Que?
I listened to Rush today too. It sounds like they have snuck in some healthcare language that basically says the elderly don’t have as many years left to live, so they shouldn’t get as good healthcare as younger ones. I have a great idea. Why don’t we just disappear into the wilderness and starve to death like the old Indians used to do? That way we won’t be a bother to society. I wonder if Obama made sure his sick old grandmother got the best of care. You can bet the farm that he did!! Under his plan, she would have been left to die because she was no longer any use to anyone. This is just plain monsterous. So many things can be snuck into bills and foisted on the American people while they sleep. I don’t see how we can stop it.
Remember when Ronald Reagan said ” Government is not the solution to the problem, government is the problem”. How true.
On February 9th, 2009 at 3:49 pm, granite said:
Oh, thanks! Sorry for my ignorance. The Book of Mormon has some beautiful verses in it.
I cannot reach the Petition web page, I hope that is a good sign (no pun intended)
I have e-mailed all three of these so-called Republicans with my concerns. I told them I will support monetarily any conservative that runs against them in the future if they support this bill. I hate to threaten, but I don’t think any of these career pols understand anything but their own power. Where the hell are their principles?????
Do any of these idiots ever look at just how much principal these sub-prime borrowers have actually paid? It is my guess that they own very little of the house they are living in. The banks own these houses and the borrowers are in actuality…..renters
On February 9th, 2009 at 4:23 pm,
Speaking of renters, not everyone can or should have a house. I have relatives who moved back to Minnesota from living in Florida for a couple years. This couple immediately bought a huge house in the suburbs. It was a house I only can dream of living in. She was unemployed and he was in securities. He lost his job. Then got another. But they were living way beyond their means. It turns out they were foreclosed and had to move into an apartment. They are actually very happy there and realize what they did wrong. They are comfortable, and will not be trying to buy another house until they can well afford it.
Stimulus: Down Payment on Socialism
The page times out whenever I try to submit my addition to the petition. Heavy traffic perhaps?
All I know is that dingy Harry wanted this on Friday, then Sunday, and now its tomorrow. All I can hope is that the delay means that he isn’t sure he has the votes.
I enjoy seeing the Obama honeymoon end, but $1 trillion is a bit of a high price to pay.
If government has no money except what they take from individuals and business, and individuals & business need money, why are they taking it from individuals and business to give to individuals and business?
Pure political kickbacks. If they invest in alternative energy and it can only produce 1/4 the energy at double the cost, then the cost of energy will go up. That is anti-stimulus.
Democrats just think they know better where the money should go. They do not trust individuals and business to spend correctly. They must step in and redistributute the money. Since many Democrats are individuals and businesses, why do they not trust themselves to spend it correctly but do trust themselves to spend it correctly? Hmmm.
They must be smarter than everyone else or willing to gamble that they are. Why not, if it works, they are heroes and the political landscape is changed forever. If it doesn’t work, they will be able to blame Bush and will not be held responsible. The people voted to let them. What a position to be in. Who cares about the future generations. Instead of Lets roll, the new motto is Lets roll the dice!
If anyone is still having trouble accessing the petition from the BLUE highlighted link at the bottom of the homepage, try accessing it from the top of the page at “petition”, right next to “home”.