OBAMA'S FORECLOSURE FOLLIES! OUR TAX DOLLARS!

Hello fellow sucker taxpayers! Remember Stanley Johnson?



Well President Obama is going to help him and millions of others using about 75 billion of our taxpayer dollars to bailout the lenders and borrowers who made and got loans that should have never been made in the first place. And guess who is going to help pay for this foreclosure bailout plan. Yes you and me the responsible tax payers!

Here is what President Obama said:
" We have launched a housing plan that will help responsible families facing the threat of foreclosure lower their monthly payments and refinance their mortgages. It's a plan that won't help speculators or that neighbor down the street who bought a house he could never hope to afford."

Oh yeah Mr. President? The Associated Press has Ben Bernanke telling us something completly different:

"AP, Feb. 25: Defending the program Tuesday at a Senate hearing, Federal Reserve Chairman Ben Bernanke said it's important to save those who made bad calls, for the greater good. He likened it to calling the fire department to put out a blaze caused by someone smoking in bed. "I think the smart way to deal with a situation like that is to put out the fire, save him from his own consequences of his own action but then, going forward, enact penalties and set tougher rules about smoking in bed."

No Mr. Bernanke the person who is smoking in bed deserves to get burned. You don't just toss the cigarette to us taxpayers who just happen to live next door and think everything will be fine.

Then there is this ends justify the means rational from Sheila Bair:

"I think it's just simply impractical to try to do a forensic analysis of each and every one of these delinquent loans," she told NPR.

Wait a minute! You don't think it's practical to look at these loans. Isn't that how the banks got into this mess in the first place? But, there's more to this idiotic logic.

And, Bair added, it's in the "collective economic interest" to not have more foreclosed homes on the market. "To try to punish all of those parties now by foreclosing on more homes, putting more families on the street, putting more houses onto the inventory, creating more downward pressure on home prices when you have so much inventory on the market right now. Is that in our collective economic interest to do that? I just don't think that it is."

That's the problem with people like this in the Obama administration they don't think! While foreclosure is certainly bad for the reckless borrowers and the banks who gave out the loans. Having us responsible taxpayers bail this bad behavior is not the answer. Let the foreclosures happen and then there will be opportunities for more responsible people to get into these homes. People like:

Lynn Powers, 39, a Bethesda, Md., resident who describes herself as a “liberal Democrat” who has been hardworking, prudent and responsible — and now feels “like a fool."“We were in the market,” she says. “We put out eight bids and got outbid every time. It was very upsetting for us. I want to see some accountability and responsibility across the board. The only way for me to have an affordable home, and I’m not looking for a McMansion at all, is if we let the chips fall, in a sense. This is still the bubble — the prices have to come down. You can’t just subsidize some of the people. I don’t know how you deleverage. It is going to be painful, but this is also hurting the people who behaved responsibly.”
What does she mean by “responsibly”?

“People who didn’t overbuy. Who stuck to their guns. Who read their contracts,” she says. She and her husband wound up buying a 600-square-foot studio and moved to a rental when they had their daughter, now 18 months old.

“My husband and I paid for our cars in cash,” she says. “We have no credit card debt. We have no student loans. I don’t buy Starbucks, but that’s because they’re non-fair trade, nonenvironmental.”

When they tried to buy a house, she said, “We just felt outgunned.” And now, she says, “I feel very outgunned as a citizen.”

And she should feel out gunned. Her government is subsidizing the people who out bid her on some of those houses. Now when she and her husband might be able to grab a foreclosed property at a reasonable price the Obama administration is rigging the market. This chart from a TIME magazine article shows what has been happening due to the foreclosures.

The chart shows home prices approaching a more normal average so that responsible people like Lynn Powers and her husband can get another shot at being a homeowner. But, Obama's plan is to stop the foreclosures and so keep house prices artificially high.

I think this woman from Maryland pretty much sums up the feeling of many of us responsible taxpayers to Obama's misguided plan:

“I am an Obama supporter, campaigned for him, baked cookies for him; my husband and I are Democrats all the way, but this is the issue that gets our goat.”
Echoing Santelli’s complaint, a Silver Spring, Md., mom who did not want her name used adds: “I’m not sure why we should work and pay for someone else to have a granite countertop or an extra bathroom.” When asked about people who hadn’t overreached but had lost their down-?payment money when the value of their homes had dropped, she replies, “We put money in a 401(k), and we lost that money, and no one is going to give it back.”-Politico

Thanksgiving

Well there may be some things to be thankful for this Thanksgiving Day.

1)That John (Juan) McCain is not President.

2) That Obama seems to be taking a more centrist position in setting up his administration.

3) That things may be improving in the housing market according to a story in today's Washington Post:

Would-be mortgage borrowers have rushed to refinance their loans and even weighed plans to buy homes following the government's move this week to loosen consumer lending.
With interest rates suddenly plummeting, "the phone is ringing, the e-mails keep coming," said Jennifer Du Plessis, a mortgage adviser at Prosperity Mortgage, the lending arm of Long & Foster. "Real estate agents are hovering outside our office saying: 'I've got another client who wants to refinance.' "

Now if we can only keep Congress and whatever administration from doing something stupid like buying up "toxic assets" aka sub prime loans with good taxpayer money we may actually be seeing light at the end of the tunnel in this economic downturn. This is certainly something to be thankful for.

BAILOUT: The fix was in...

This BCP post from February is going into the I told you so file. All the hoopla about the administration officials coming up with this plan to buy up the toxic mortgages and bad sub prime debt and make us U.S. taxpayers pay for it is a bunch of B.S. The fix was in many months ago as I correctly predicted in February. It always seemed curious to me why the Bank of America would buy a failed mortgage broker like Countrywide with all it's bad sub prime debt. The answer is now clear Bank of America had a plan to unload that bad debt from the Countrywide purchase on us taxpayers from the begining. With the recently announced plan to have the government spend 700 billion dollars to purchase these subprime loans it looks like they succeeded. Here is exhibit A from my Post in February 2008:



"Bank of America, which is in the process of acquiring Countrywide Financial and has potentially huge exposure, has circulated a proposal to create a new federal agency that would buy vast quantities of delinquent mortgages at a deep discount and replace them with fixed-rate federally guaranteed loans."-New York Times 2/2008



That sounds very similar to what is being railroaded in in Washington this week. Just remember I told you so.

Anatomy of a sub prime problemo.

The Washington Post has an article that belongs in the "Hola suckers" file concerning the sub prime loan debacle that we responsible citizens will be paying for. As is usual in liberal mainstream media papers like the Washington Post no mention is made about the legal status of some those involved. Use your own editorial judgment because you can't rely of those of the Washington Post. Still the article shows the problem that all of the rest of us RESPONSIBLE citizens will be paying for. Here are some of the money quotes:

"Looking back, Glenda Ortiz can see she did everything wrong when she bought her house in 2005."

Duh! When you do everything wrong. Guess what happens?

"Ortiz, who speaks little English, said she didn't know much about the U.S. banking system. So when a Mary Kay saleswoman, Maria Esperanza Salgado, came to her door and said she could help her buy a house, Ortiz said, she believed her."

What could go wrong here? Ortiz has lived in the U.S. for nine years and speaks little English? Perhaps if she spent a little less time watching Spanish language Novellas on TV she might have been able to read some of the documents she signed.

Exhibit A:
"She signed papers in English that she didn't understand. One said she was married to a man she didn't know. "

Uh huh. Well this must be a new law that I am not aware of.

"Erick Gutierrez, housing director for the Washington-based Latino Economic Development Corp., said is all too familiar. Gutierrez blames the government for allowing so many sub prime loans, such as Ortiz's, which required no proof of income."

Oh yeah, I blame the government too! But, unlike Mr. Gutierrez I blame the government for not making sure that some of the people getting these loans are supposed to be in this country in the first place. Of course there is no mention of this in the article.

"According to the Center for Responsible Lending, 40 percent of loans to Latinos are subprime, and it projects that one out of five of these loans made in 2005 and 2006 will go into foreclosure."

Of course not all of these loans to Latinos where being made to illegals but, no one in the mainstream media or our government seems to be asking the question of how many of these sub prime loans were given to people who should not have been here in the first place. But, we responsible U.S. citizens should be demanding that they do! After all we are paying for this debacle.

"She said she had become so depressed about losing her home that she stopped working for more than a year."

Hmmm stopped working for a year? I wish I could do that. How did she survive? Oh but, she has somehow managed to scrape together enough money to hire another lawyer. Hola suckers!

Bank of America is banking on amnesia.

Bank of America is going to be buying Countrywide Mortgage and it's sub prime loan portfolio. Of course they think they can make money eventually with this deal. The head of Countrywide certainly will. Here is the money quote:"In a written statement yesterday, House Financial Services Committee Chairman Barney Frank (D-Mass.) said Mozilo, "who will be profiting from this transaction personally," should "donate a substantial portion of the $150 million he has collected over the last several years to nonprofits and other institutions that are helping us deal with the problem he helped to create."
I'm sure Bank of America also has it's bases covered too. If things go sour they can just call up their lobbyists in Washington to get the U.S. taxpayers to bail them out. After all Bank of America is one of the banks that give credit cards to illegal immigrants. Now this always sounded like a pretty nutty idea to me since these customers are known to have broken U.S laws already. Yet Bank of America wants them as customers. Here let Bob explain it and see if it makes sense to you:

You can take this to the bank.

" NEW YORK, Nov. 4 -- Citigroup has installed former Treasury secretary Robert Rubin as chairman after the widely anticipated resignation of Charles Prince, the embattled chairman and chief executive who faced mounting criticism in the wake of a $6.5 billion write-down for the third quarter.
After an emergency board meeting Sunday, Citigroup, citing significant declines in the value of subprime-related securities in the past month, estimated that it would take additional write-downs of $8 billion to $11 billion." - Washington Post



How could this have happened? Just because the banks had tapped out America's middle class and started giving out subprime loans to people who had no ability to repay them. That seems like an ok business practice. I mean when they give out a $650,000 mortgage to an illegal immigrant making $18,000 a year. What could go wrong? Adios Citibank, Hola Bank of America.