Obama's August Surprise to Help Dems in November

[bobbyw24]

Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington to Wall Street that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth. An estimated 15 million U.S. mortgages – one in five – are underwater with negative equity of some $800 billion. Recall that on Christmas Eve 2009, the Treasury Department waived a $400 billion limit on financial assistance to Fannie and Freddie, pledging unlimited help. The actual vehicle for the bailout could be the Bush-era Home Affordable Refinance Program, or HARP, a sister program to Obama’s loan modification effort. HARP was just extended through June 30, 2011.

The move, if it happens, would be a stunning political and economic bombshell less than 100 days before a midterm election in which Democrats are currently expected to suffer massive, if not historic losses. The key date to watch is August 17 when the Treasury Department holds a much-hyped meeting on the future of Fannie and Freddie. A few key points:

1) Republican leaders believe this is going to happen since GOPers and Democratic moderates in the Senate are unwilling to spend more taxpayer money on more stimulus. But such a housing plan would allow the White House to sidestep congressional objections and show voters it is doing something tangible about an economy that seems to be weakening.

2) Wall Street banks are alerting their clients privately to this possibility. Here is what some are cautiously saying publicly. This from Goldman Sachs:

GSE policies are one of a dwindling number of policy levers the administration has left to pull, so it is conceivable that changes could be made, though there is no sign that a policy change is imminent. The Treasury’s essentially unlimited ability to provide financial support to the GSEs creates an interesting situation over the next twelve months: the GSEs could potentially be used to provide additional support for the housing market and, to a lesser extent, the broader economy in 2H 2001.

And this from Mizuho Securities:

http://blogs.reuters.com/james-petho...se-from-obama/

[bobbyw24]

YouTube - ‪Obama Is Going To Pay For My Gas And Mortgage!!!‬‎

[Mahkato]

Why don't we just declare a Jubilee Year and cancel everyone's debts everywhere?

[AuH20]

I hate the political class with even more of a passion if this is true. Bribing deadbeats with the federal treasury so they're not removed from power?

[liberalnurse]

I'm speechless. Busted our ass to pay off our mortage in 15 years. Gave up alot of things over those 15 years to make it happen. And for what? So, I can now pay off other people's mortgages? This $#@! is surreal.

[Elwar]

Why don't we just declare a Jubilee Year and cancel everyone's debts everywhere?

It's a year long party!!! Woo Hoo!!!

[A Son of Liberty]

My fuse is getting shorter... much shorter.

I've been sitting here on the sidelines, trying to save money and be responsible and do it "the right way" and I'm finding out I've been nothing but a big sucker, and a source-of-funding for this kind of BS!?

This is unconscienable... I'm practically speechless with anger...

[Jordan]

I was reading this thinking it must be from some right-leaning blog run by some bearded guy with 50 guns, a Gadsden flag, and a long, thick beard.

Then I realized it was on Reuters. $#@!.

[Jordan]

You know, they might actually recover more of the loaned funds if this is allowed to happen. So many people are just skipping their payments and waiting to be foreclosed upon knowing the other option is to pay $400k in mortgage payments for a $100k home.

Not that I agree with it or anything.

[Original_Intent]

I'm speechless. Busted our ass to pay off our mortage in 15 years. Gave up alot of things over those 15 years to make it happen. And for what? So, I can now pay off other people's mortgages? This $#@! is surreal.

That's why if they do this it will backfire. Yes, you will have bought off the votes of people that receive "debt forgiveness" but you are going to piss people off no end who either have worked hard to pay off or who are not under water and therefore get nothing. I see huge unintended consequences if this happens, and I think it will burn the Dems if they do it. Major blowback.

Not that I think they should do it, but they would get a lot better bang for the buck with a $1,000 to $2,000 per household stimulus check. It would be terrible for the country long term, but I have no doubt it would save some jobs.

[Jordan]

Not that I think they should do it, but they would get a lot better bang for the buck with a $1,000 to $2,000 per household stimulus check. It would be terrible for the country long term, but I have no doubt it would save some jobs.

Could've been $2,600 if TARP never happened.

[Original_Intent]

I should have also clarified, I did not mean regular peoples' jobs would be saved, I am talking about politicians.

[rprprs]

I should have also clarified, I did not mean regular peoples' jobs would be saved, I am talking about politicians.

Glad you clarified, cuz I was wonderin'...

[RCA]

Does anyone else see a tiny bit of hope when this stuff happens that there are in fact two parties at war with each other as opposed to one party with two halves?

[puppetmaster]

what does this do to housing prices......seems like it would crush them

[Jordan]

Sent to Drudge. Now on the front page of Drudge. Props? :P

[awake]

What an awful precedent to set. I doubt it will take place...This would revalue the housing market overnight; affecting the assets the FED holds as collateral reserves. The Fed assets (over valued bad mortgages)would tank in market price and leave gross amounts of unrecoverable inflationary money in the banking system to cause havoc.

It might win an election, but it will tip over the economy.

If it is a bailout for home owners not paying their mortgage it will create a large incentive to not pay your mortgage and borrow 3 houses next time instead of 2..

[michaelwise]

Not going to happen. I believe it's just a rumor.

[michaelwise]

Why don't we just declare a Jubilee Year and cancel everyone's debts everywhere?

The complete and total economic collapse wipes out all debts.

[devil21]

Does anyone else see a tiny bit of hope when this stuff happens that there are in fact two parties at war with each other as opposed to one party with two halves?

Interesting thought. The rise of Tea Party types (Rand, Angle, Amash, etc) certainly must have a lot of the current power structure worried. It's much easier to follow a communist transformation agenda with Democrats leading the way than getting Republicans (conservatives) to do it. Maybe there is some hope and change afoot

[Rael]

I'd be in favor on canceling everyone's mortgages and turning the property over to the mortgage holders.

[Matt Collins]

I never really honestly believed there was a conspiracy to ruin the American economy until now.

[LibertarianfromGermany]

YouTube - ‪Obama Is Going To Pay For My Gas And Mortgage!!!‬‎

I used to find this video funny; now the joke is on me though, it seems like she understood politics better than I did.

[qh4dotcom]

I'm speechless. Busted our ass to pay off our mortage in 15 years. Gave up alot of things over those 15 years to make it happen. And for what? So, I can now pay off other people's mortgages? This $#@! is surreal.

Go and scold all the folks you know who voted for Obama. Stop giving money to anyone who voted for Obama, especially Hollywood.

[Beanie_N]

Wow, if this passes the blowback will immense. If this happens and the GOP can't run with this they truly are incompetent; this would be the easiest way for the dems to go from losing 30-40 seats to 100+ seats.

[AuH20]

This sounds like a trial balloon as are all Obama Administration policy "leaks." They want to gauge public sentiment before they attempt something of this stature.

[Philhelm]

I never really honestly believed there was a conspiracy to ruin the American economy until now.

With each passing day, my conviction in the belief that the intentional economic ruin of America is intentional, becomes ever stronger. While we may not have the most brilliant representatives, most of them should be educated enough to realize how destructive their policies are. At this point, I can't lay the blame on simple ignorance.

[Matt Collins]

With each passing day, my conviction in the belief that the intentional economic ruin of America is intentional, becomes ever stronger. While we may not have the most brilliant representatives, most of them should be educated enough to realize how destructive their policies are. At this point, I can't lay the blame on simple ignorance.

Einstein once said that "only two things are infinite, the universe and human stupidity...and I'm not sure about the former".

Yeah I've arrived at the same conclusion as you but I just have a hard time believing it is stupidity any longer