The Golden Truth: Obama May Make the Housing Problem Even Worse

Friday, February 26, 2010

Obama May Make the Housing Problem Even Worse

Seriously, who the F$%K voted for this guy?

"Obama May Prohibit Home-Loan Foreclosures Without HAMP Review The Obama administration may expand efforts to ease the housing crisis by banning all foreclosures on home loans unless they have been screened and rejected by the government’s Home Affordable Modification Program." Bloomberg Link

Honestly, this will create such a backlog of non-paying mortgages and delay payment resolution that ultimately it will do nothing more than stimulate and incentivize "jingle mail," in which underwater, cash-strapped homeowners turn in their keys to the bank and simply walk away from the situation. Distressed homes will pile up, creating a massive inventory problem and the decline in home values will accelerate.

Furthermore, it will create a massive delay in the disbursement/payment of ANY cash flow to banks holding the mortgages and to the investors in the mortgage trusts which helped finance the housing bubble. Of course, this may also set up the direct subsidization of dead-beat homeowners, as banks bleeding dry from lack of cash flow from the defaulted mortgages will cry to Obama and Congress, who will then authorize the payment of Treasury/Taxpayer money directly to the banks until the defaulted mortgages are restructured.

The bottom line is that the Government should absolutely not be using Taxpayer money to subsidize the banks and distressed homeowners. This is not a social or legal or national security issue. This is a business problem that should be settled between the homeowners who took on more than they could pay and banks who were willing to lend to them. Why should I be required to take money out of my pocket to help settle a bad business decision made by others?

It just gets worse by the day...

8 comments:

AnonymousFriday, 26 February, 2010
Final nail in the MBS coffin - as if it needed one....
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John in MDFriday, 26 February, 2010
Mandatory HAMP reviews or postponement of foreclosures serves the banks interests, Davey my man. The longer a loan can be stalled and the property kept from distress sale means the longer defaulted loans can be carried on the banks books as "mark to fantasy." Once the proerty goes to sale, only mark to market is available and the loss is realized.
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Dave in DenverFriday, 26 February, 2010
Yes, there's a lot of reasons the banks are pushing for this, the most of significant of which is that it will lead to much greater Government subsidization to the banks.
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waterboyFriday, 26 February, 2010
Just another indicator that responsible financial behavior will NOT be rewarded...punish the wise. I love this country.
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Dave in DenverFriday, 26 February, 2010
waterboy - i bet I know which comedic actor is your favorite LOL
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AdamFriday, 26 February, 2010
Damn, I was hoping to be able to buy a house for a song in 2012. Guess I'll just have to wait until 2014...
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Harvey GeeFriday, 26 February, 2010
They might as well make the banks landlords and rent their homes until they get back on their feet.

If you can't afford your home now, a loan modificaton won't help 75% out there.
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Dave in DenverFriday, 26 February, 2010
@Adam: why buy at all? Regardless of how "cheap" homes get, the Govt will in all likely be forced to jack property taxes up to an astronomical rate. Plus, when the bailout money for insurance companies/banks dries up, the cost of insurance will do a moonshot. renting rocks!

@Harvey: it ain't the banks that are landlords - the money is coming from Taxpayers.
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Why Gold?

Gold is the world's oldest currency. You exchange your fiat currency (dollars, euros, yen, yuan) into gold as an insurance policy against catastrophic Central Bank and Government policies which serve to destroy the value of fiat currencies and destroy democracy.

Gold can ONLY be considered an investment to the extent that it remains significantly and historically undervalued in relation to the fiat currencies against which its value is measured. Otherwise it remains the world's oldest currency and is completely free from the counterparty risk associated with currency by Government fiat (i.e. fiat currencies rely on a Government's "full faith and credit.")

Quote Of The Month Courtesy of "Jesse"

Unfortunately for Larry Summers, Ben Bernanke, and their friends at the BIS, they have not yet figured out how to print physical gold, silver, and other essential commodities, and the world is reaching the point where it might simply start ignoring the New York based markets with respect to essential commodities such as basic materials, oil, foodstuffs, and the like, as they become increasingly irrelevant, fraudulent, and Orwellian. And then where will the financial engineers be, except with no more excuses and no place to hide?

Here is the link to his entire commentary, well worth a read:

http://jessescrossroadscafe.blogspot.com/2010/07/gold-daily-chart-shock-and-awe-for.html

Great Quote From Jim Rogers On Govt CPI Reporting

JR: I mean, we have inflation now. If you go to the shop, whether it’s groceries, or education or insurance or health care, prices are going up for everything. The government lies about it in the US. Some countries lie, many countries don’t: Australia, China, India and Norway. Many countries don’t lie about it and acknowledge that we have inflation. Others lie about it, the UK and the US, but if you go shopping you know prices are up.

Q: Are you saying that the American Consumer Price Index (CPI) published by the US Bureau of Labor Statistics is a lie?

JR: In my opinion, yes, of course it is. Have you looked at it? They’ve changed their accounting several times in the past few decades. When housing was 20% to 25% of the CPI and housing was going up, they didn’t count it, saying rents weren’t going up, and then when home prices started going down, they counted it. It’s the same with many things. It’s staggering some of the tortuous reasoning that the BLS has used over the past 25 or 30 years. When the price of gasoline goes up, they say it’s not really going up because it’s better gasoline, better quality, therefore you’re getting more for your money. I mean, it’s endless, the stuff that they say and for some reason people sit there, although more and more people are catching on, and accept what the government says.

source: www.clusterstock.com

Quote of the Week

"The primary function of a Central Bank is to engage in the massive transfer of wealth from the middle class to the wealthy elite. The Federal Reserve was set up to do this with the blessing and support of Congress." - Dave in Denver

If you refuse to believe the above, please read "The Creature From Jekyll Island: A Second Look at the Federal Reserve" by G. Edward Griffin and then explain to me why the Senate voted down the Vitter Amendment and Congress refuses to pass a law requiring a full audit of the Fed, even though the Fed is using taxpayer-backed money to bailout Wall Street and Europe.