Barney Frank; HR 1852; SB 2338; Economic Stimulus Bill
We've previously Nattered about the Barney Frank Amendment to HR 1852 here and Senate Bill 2338 here.
Both raise GSE loan limits, but hidden inside this $150 billion fiscal stimulus PORK package...
a provision allowing FNMA Fannie Mae and FHLMC Freddie Mac for up to one year, to buy jumbo mortgages of up to 125% of an area's median home value.
This would raise limits to $729,750, exceeding the current $417,000 federal limit.
Another element of the provision would raise the loan cap for FHA mortgages to the same $729,750 in high cost areas from its current $362,000.
FHA loans have down payments as low as 3%, and also would offer options for people with blemished credit.
David Crane, Gov. Arnold Schwarzenegger's adviser on jobs and economic growth: "This is exactly what we need for California."
Dean Baker, co-director of the Center for Economic and Policy Research:
"I'm concerned, it raises the possibility that Fannie and Freddie will just be buying up a lot of bad mortgages.
If you owe $600,000 on a home that's worth $500,000 or even $550,000, there is going to be a very strong temptation to walk away." Really, do ya think?
From OFHEO which regulates the GSE's: "We are very disappointed in the proposal to increase the conforming loan limit as we believe it is a mistake to do so in the absence of comprehensive GSE regulatory reform."
The Nattering One muses... increasing GSE loan limits artificially supports unjustified high housing prices,
as incomes do not and never did support the prices, by underwriting $500K to $1 Million McMansions.
This is nothing more than a multi billion dollar government bailout of the privledged (rich), ignorant (overpaid for the house) and greedy flippers (investors),
who got us into this mess in the first place and which will ultimately be shunted onto the taxpayer through the GSE's.
This subsidy only migrates bad paper from the banks to the GSE's and could cost taxpayers upwards of $260 billion within two years. But how Nattering One?
In 2005, greedy stupid speculator bought at $800K and put $40K down (5%), financed with interest only.
Real value is now underwater $600K and the realtor can't sell it. FHA refi's at $800K value to pay off bank caught holding bag $760K loan.
Borrower qualifies but still can't sell it and defaults after 1 year of payments. FHA takes it back, sells it at $600K, less $100K expenses, thats a -$260K loss.
Multiply by a million of these loans, you get $260 billion the taxpayer will eat, instead of the banks.
In essence the banks like Countrywide can now give their customer a new "liar" loan and resell it quickly to the GSE's before the borrower defaults.
As demonstrated above, this artifical support will only delay the inevitable.
When the public housing ATM has been tapped from this round of refi's, and the debt levels have truly been maxed out,
the ensuing foreclosure and credit market fallout will be even worse.
Ironic isn't it? We can find money to help the rich have housing, but we can't find money for poor childrens healthcare and long term unemployed.
Lets mail the poor bastards a $600 check, while we subsize the rich ($170K a year) bastards with low interest $700K loans. Thats the ticket!
This stimulus package gives $417 subsidies per month for 30 years ($150,120) to the politicians rich friends and neighbors...
and gives the chumps that vote for them a lousy one time check of $600. How so Naybob?
According to California Sen. Barbara Boxer's office: On a $650,000, 30-year fixed rate mortgage,
the lower rate on the "conforming" GSE "jumbo" would result in an average $417 per month savings, every month for 30 years!
This is nothing but despicable, digusting, a disaster and disgrace. Oh and did anyone check to see if this subsidy is available to all areas in all 50 States?
Or is it just for one year in California, New York and DC? On the FHA loans, only in higher cost areas, so Chicago, Omaha, Dallas, Atlanta, eat shit.
More white collar welfare (tax cuts) and more deficit spending by our criminally insane politico possy sitting on the hill of fools in DC.
When Latin America and Asia had financial crises in the 90's, our officials advice to them was...
Don't bail out bad banks, don't intervene when stock market and real estate bubbles pop, let your overblown economies shrink to their natural levels.
It was all, you've got to be tough and take your medicine. Oh well, do as we say, not as we do.
What a miserable pack of greedy spoiled hypocrites. Don't worry, they will get what they deserve in the end. No pun intended.
I strongly urge you to contact your House & Senate representatives to strike down this shameless bailout which promotes and enables greed and gambling at the publics expense.
Both raise GSE loan limits, but hidden inside this $150 billion fiscal stimulus PORK package...
a provision allowing FNMA Fannie Mae and FHLMC Freddie Mac for up to one year, to buy jumbo mortgages of up to 125% of an area's median home value.
This would raise limits to $729,750, exceeding the current $417,000 federal limit.
Another element of the provision would raise the loan cap for FHA mortgages to the same $729,750 in high cost areas from its current $362,000.
FHA loans have down payments as low as 3%, and also would offer options for people with blemished credit.
David Crane, Gov. Arnold Schwarzenegger's adviser on jobs and economic growth: "This is exactly what we need for California."
Dean Baker, co-director of the Center for Economic and Policy Research:
"I'm concerned, it raises the possibility that Fannie and Freddie will just be buying up a lot of bad mortgages.
If you owe $600,000 on a home that's worth $500,000 or even $550,000, there is going to be a very strong temptation to walk away." Really, do ya think?
From OFHEO which regulates the GSE's: "We are very disappointed in the proposal to increase the conforming loan limit as we believe it is a mistake to do so in the absence of comprehensive GSE regulatory reform."
The Nattering One muses... increasing GSE loan limits artificially supports unjustified high housing prices,
as incomes do not and never did support the prices, by underwriting $500K to $1 Million McMansions.
This is nothing more than a multi billion dollar government bailout of the privledged (rich), ignorant (overpaid for the house) and greedy flippers (investors),
who got us into this mess in the first place and which will ultimately be shunted onto the taxpayer through the GSE's.
This subsidy only migrates bad paper from the banks to the GSE's and could cost taxpayers upwards of $260 billion within two years. But how Nattering One?
In 2005, greedy stupid speculator bought at $800K and put $40K down (5%), financed with interest only.
Real value is now underwater $600K and the realtor can't sell it. FHA refi's at $800K value to pay off bank caught holding bag $760K loan.
Borrower qualifies but still can't sell it and defaults after 1 year of payments. FHA takes it back, sells it at $600K, less $100K expenses, thats a -$260K loss.
Multiply by a million of these loans, you get $260 billion the taxpayer will eat, instead of the banks.
In essence the banks like Countrywide can now give their customer a new "liar" loan and resell it quickly to the GSE's before the borrower defaults.
As demonstrated above, this artifical support will only delay the inevitable.
When the public housing ATM has been tapped from this round of refi's, and the debt levels have truly been maxed out,
the ensuing foreclosure and credit market fallout will be even worse.
Ironic isn't it? We can find money to help the rich have housing, but we can't find money for poor childrens healthcare and long term unemployed.
Lets mail the poor bastards a $600 check, while we subsize the rich ($170K a year) bastards with low interest $700K loans. Thats the ticket!
This stimulus package gives $417 subsidies per month for 30 years ($150,120) to the politicians rich friends and neighbors...
and gives the chumps that vote for them a lousy one time check of $600. How so Naybob?
According to California Sen. Barbara Boxer's office: On a $650,000, 30-year fixed rate mortgage,
the lower rate on the "conforming" GSE "jumbo" would result in an average $417 per month savings, every month for 30 years!
This is nothing but despicable, digusting, a disaster and disgrace. Oh and did anyone check to see if this subsidy is available to all areas in all 50 States?
Or is it just for one year in California, New York and DC? On the FHA loans, only in higher cost areas, so Chicago, Omaha, Dallas, Atlanta, eat shit.
More white collar welfare (tax cuts) and more deficit spending by our criminally insane politico possy sitting on the hill of fools in DC.
When Latin America and Asia had financial crises in the 90's, our officials advice to them was...
Don't bail out bad banks, don't intervene when stock market and real estate bubbles pop, let your overblown economies shrink to their natural levels.
It was all, you've got to be tough and take your medicine. Oh well, do as we say, not as we do.
What a miserable pack of greedy spoiled hypocrites. Don't worry, they will get what they deserve in the end. No pun intended.
I strongly urge you to contact your House & Senate representatives to strike down this shameless bailout which promotes and enables greed and gambling at the publics expense.
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