« | »

Obama Unveils His $75B ‘Housing Bailout’

From those New Dealers at the Associated Press:

Obama unveils $75 billion mortgage relief plan


February 18th, 2009

President Barack Obama says his $75 billion plan to tackle "a crisis unlike any we’ve ever known" in home foreclosures is necessary to help save the economy.

Obama unveiled the plan in Arizona, hard-hit by the housing crunch. More expensive than expected, it aims to keep 9 million people from losing their homes.

One part will ease refinancing for people who owe more on their mortgages than their homes are currently worth. Another provides incentives for mortgage lenders to help those on the verge of foreclosure…

In tandem, the Treasury Department said it would double the size of its lifeline to Fannie Mae and Freddie Mac. The government, which seized the mortgage finance companies last fall, said it would absorb up to $200 billion in losses at each company.

The plan is more ambitious than initially expected – and more expensive. It aims to aid borrowers who owe more on their mortgages than their homes are currently worth, and borrowers who are on the verge of foreclosure.

The initiative is designed to help up to 5 million borrowers refinance – if their mortgages are owned or guaranteed by Fannie Mae or Freddie Mac. It also provides incentive payments to mortgage lenders in an effort to convince them to help up to 4 million borrowers on the verge of foreclosure…

Headlining Obama’s plan was a $75 billion Homeowner Stability Initiative, which would provide a set of incentives to lenders to cut monthly mortgage payments to sustainable levels. It defines this at no more than 31 percent of a homeowners income. Funding would come from the $700 billion financial industry bailout passed by Congress last fall.

Another key component: a new program aimed at helping homeowners said to be "under water" – with dwellings whose value have sunk below the principal still owing on their mortgages. Such mortgages have traditionally been almost impossible to refinance. But the White House said its program will help 4 to 5 million families do just that.

Obama said this change would come at "roughly zero" cost to taxpayers.

Of the nearly 52 million U.S. homeowners with a mortgage, about 13.8 million, or nearly 27 percent, owe more on their mortgage than their house is now worth, according to Moody’s Economy.com…

The plan also seeks to bolster confidence in Fannie Mae and Freddie Mac, the mortgage giants effectively taken over by the government last year. The White House said the Treasury will be able to increase its funding commitment to the two by using money Congress set aside last year, and will continue purchasing mortgage-backed securities from them.

The Treasury said the increased support for Fannie Mae and Freddie Mac didn’t reflect projected losses at the two companies, which were seized by government regulators last September. The two companies are currently projected to need a combined government subsidy of about $66 billion, well short of the new promise of up to $400 billion

Funny, this is just about exactly what ACORN and La Raza were demanding.

Of the nearly 52 million U.S. homeowners with a mortgage, about 13.8 million, or nearly 27 percent, owe more on their mortgage than their house is now worth…

Was there ever a time when this was not true for a large portion of mortgages?

By the way, when people were making money hand-over-fist flipping houses, was there a windfall profit tax that went to the US taxpayer?

Of course not.

But we have to bail out the speculators and others who saw buying a house they couldn’t afford as an easy road to easy street.

Compare and contrast their treatment with, say, oil speculators.

This article was posted by Steve on Wednesday, February 18th, 2009. Comments are currently closed.

62 Responses to “Obama Unveils His $75B ‘Housing Bailout’”

  1. curvyred says:

    “a crisis unlike any we’ve ever known”

    How many times during the next 4 years are we going to here that statement?

    • 1sttofight says:

      If DuhOne keeps screwing things up like he has started out, we will hear it very often.

    • MinnesotaRush says:

      “a crisis unlike any we’ve ever known” .. a tag line for obama’s new reality show .. “Name Your Crisis!” .. or .. “What’s Your Baby Crisis?”

    • Liberals Demise says:

      Anyone counting how many times Obummer has said the word, “CRISIS” in the past 28 days?
      God…..I’m sick of everytime he opens the hole he calls a mouth, the word “CRISIS” spews forth.

      He is THE CRISIS and the CRISIS is getting worserest E-V-E-R-Y-T-I-M-E he says it!!!!
      I’m sick up and fed of his crisis!

    • yellarcan says:

      Oh the ability to point out the obvious. Kinda makes ya feel all fuzzy huh? If this is his best, we have a long 4 years ahead of us.

  2. clifcrds says:

    This little cartoon sums up my feelings about what the Commiecrats are doing with our tax money (and the tax money of future generations)!


  3. Consilience says:

    “a crisis unlike any we’ve ever known” — the thug messiah thrives on the “crisis” real and mostly imagined. this man is a menace.

  4. BannedbytheTaliban says:

    On the CNN site, Obama is quoted as saying “In the end, all of us are paying a price for this home mortgage crisis.” What it is supposed to read is: “In the end, all of us will pay for deadbeats’ mortgage crisises.”

    • Colonel1961 says:

      Precisely. Reminds me of the scene in ‘Goodfellas’ where Ray Liotta’s character is calling all the squares that work 8-to-5 and pay their bills ‘dead’. I’m starting to understand… Perhaps free Gubmint cheese is the way to go. Where’s my bailout?!?! Where’s my settlement?!?! Where’s my FEMA card?!?!

  5. oldswimcoach says:

    So, basically I need to skip two house payments and then the government will refinance me at a sweetheart rate. I’ll bet I’m the only home owner in America that figured that out, sweet!

    Isn’t it great to have such a smart president with such well thought out plans to save us from this economic crisis!

  6. proreason says:

    S&P 500 is down almost 5% on this news.

    We are in big trouble people, big trouble.

    This idiot needs to crawl back to his dorm room before the country implodes.

    In spite of what he and his brain-addled advisors think, you can’t create money out of thin air.

    The piper must be paid, and he is destroying the people who can make the economy work.

    We are headed for a catastophe like the 1930’s.

    Month 2 starts in 3 days.

    (note: for those who don’t see a connection with the Stock Market, or who don’t care……..the reason people are being laid off today is because stocks have been down 40-50% since october. When share prices are down, businesses are obligated to try to get them back up. Unlike our Moron government, businesses can’t print money, so they have to cut costs. They aren’t going to sell the factory, so what they do is lay people off. So declining stock prices are a VERY BAD thing, whether you hate or love business. Doesn’t matter. When stocks go down, people lose jobs. period.)

    • Colonel1961 says:

      PR: you make some good points, but companies also use recessions to get rid of the dead wood, as they should. Yes, it makes them more profitable and, as someone so succinctly pointed out a few weeks ago, the purpose of a corporation is to make money (profits), not to create jobs – job creation is completely ancillary. Tough words, but entirely true.

    • oldswimcoach says:

      PR – I got out of the market last spring with the exception of two energy stocks and missed most of the crash. Just sold the energy stocks today without much damage to my bottom line (taxes are another discussion).

      Not sure where the bottom of the market is, but Obama seems determined to find it with his “recon by fire” economic policies.

    • proreason says:

      colonel: i agree.

      My purpose with the comment was to point out to people that the stock market has a very material impact on everybody’s life, whether you are an investor or not.

      If The Moron would get out of the frigging way, companies would adjust to the new reality, and the economy would recover. Some tax cuts would spur that on.

      But The Moron doesn’t want to help…..he wants to make sure the oligarchy increases its power. They like controlling 100% of a small pie much better than 50% of a big pie. And besides, it’s rigged so they won’t lose a dime.

    • oldswimcoach says:

      “FDR’s Folly” is a fascinating case study of where we’re headed for the next several years.

    • proreason says:

      Coach, as Rush points out……FDR was actually disappointed when the economy began to recover some in 1936 and 37.


    • U NO HOO says:

      “what they do is lay people off.”

      And then work employees over time as long as possible before recalling or hiring.

    • U NO HOO says:

      “get rid of the dead wood”

      My experience is that companies never get rid of the dead wood that hires the dead wood.

  7. 12 Gauge Rage says:

    So is this the big crisis Obama was supposed to be tested on within his first six months? While I still don’t make enough money to pay any taxes, I nonetheless want to improve the quality of life for my family which would eventually entail earning more money and paying taxes because of that.

    Again, I feel as if I’m beating a dead horse here, but if our fellow Americans had simply learned to live within their means by purchasing homes accordingly, we wouldn’t be in this mess.

    Since I’m opposed to this stimulus package I find myself in a moral dilemma of what to do when the government sends me my stimulus check. My wife suggests that we deposit it in savings for a rainy day. My first inclination however was to go out and buy more weapons and ammo.

    • A Mad Pole says:

      12, I do not think there will be any stimulus check arriving. They will just adjust the payroll deductions so you get about $13 more per week.
      I saw a newsletter from H&R Block that “explains” the “benefits”of the “stimulus” bill and they say that the reason for doing it through the payroll is that most people had saved their last lump-sum “stimulus” checks from Bush instead of spending them (!!!!).

  8. BillK says:

    As was calculated on Rush’s show, if you do the math:

    $75,000,000,000 / 9,000,000 homeowners = $8,333.33 per mortgage.

    I’m sorry, is $8,333.33 really going to save anyone’s home?

    • proreason says:

      Rush is missing some things on this one.

      75 mill is the START. What government program ever stops at the initial allocation?

      Plus the 75 million won’t go to 9 million homeowners. 95% of it will go to the 20% of homeowners who have “suffered” for centuries. YOU might get a grand. THEY will have their mortgage payments cut in half.

    • jr says:

      does this figure have anything to do with the $1000 dollars for 3 years they are giving the banks and the $1000 dollars they are going to give the homeowner for 5 years? are they not forcing the banks to participate? are my deposits safe in any bank or are we looking at our government at repatriating all deposits?

  9. 64dodger says:

    “You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is about the end of any nation. You cannot multiply wealth by dividing it.”

    – Dr. Adrian Rogers

    • TwilightZoned says:

      I do believe we are on the cusp of this philosophy as we type. 40% of the population does not pay taxes (higher including politicians). Those of us who do are getting to the breaking point of why bother since we don’t receive any benefits. I try not to be pessimistic, but it sure appears the end of this great nation is spiraling downward at an accelerated pace.

  10. pdsand says:

    I think it’s almost to the point where we can use the current crisis as an historical example to determine the proper way to address the current crisis. I mean the stimulus payments went out and there was growth in the GDP that quarter. The TARP went out starting when, October or November, and there has been all bad news ever since.
    Of course I saw on the front page of the NYT the Japan example being used as an historical example of what not to do as well, but we’re following right in their footsteps.
    The stimulus payments weren’t my favorite thing ever, because I thought it was a shameful attempt to buy votes by both parties, but it did show that if you let people keep more of their own money and decide how to spend it, the economy at large has a way of working itself out.

  11. Rusty Shackleford says:

    To quote Supertramp, “Crisis? What Crisis?”

    But seriously folks, as I’ve heard over and over, the Bush-blamers tell us, “Well, Bush gave the mortgage lenders billions!”. But now we see the real root of the problem. Not that it was invisible last fall but in typical “emergency” fashion, the democrats answer, as it has been with everything from crime to bad schools, to teenage pregnancy, to drug abuse–“Throw money at it”.

    There is, however a huge disconnect of which most of the Obama supporters are unaware: That of the entrenched democrats and the neophyte president being completely out-of-touch with their voters. I have to, again, go back to our good friend, Joe, the plumber, who confronted the chosen one with a pretty straight comment and was vilified for it. But it illustrated perfectly how unaware this well-shod rookie is to how America operates.

    Obama doesn’t know, or doesn’t care, or both, that person A toils to make money so that he can pay person B for goods/services, etc etc. Since we haven’t had a barter system for some time and eBay is proving to be somewhat cumbersome, Barry may not be aware of this.

    I, for one, do not fathom, and therefore have a complete disconnect in the other direction, how a guy who’s the same age as me, lived through the same times as me, seen much of the same things I have and yet, comes up with a completely different set of scruples.

    What I have been hearing though, is that certain democrats are “concerned” about, not just conservative backlash, but backlash from their constituents. Surprise surprise….kind of like the boss finding out that you’re skimming profit off of his income. Or, worse, that your giving dope to his kids.

    Yeah, that kind of backlash.

    And, much as Oblabby would probably like to wish all that into the cornfield, the day is coming when Americans say “NO!” and he’ll be so angry he’ll become very spiteful and then we’ll be in soem really serious trouble. He doesn’t know or understand disapproval from others. He will anger and get ugly.

    I say let’s do it now and make him mad. Might as well get it over with.

    • proreason says:

      “I, for one, do not fathom, and therefore have a complete disconnect in the other direction, how a guy who’s the same age as me, lived through the same times as me, seen much of the same things I have and yet, comes up with a completely different set of scruples”

      Rusty. He has been fed, clothed, scripted and flattered, for 20 years. Paris Hilton has more familiarity with your life than does The Moron.

      I mean, really, when he TRIED to show what a regular guy he is…..he complained about the price of ARUGULA. If 1% of the country knows what arugula is, I’d be shocked.

    • Liberals Demise says:

      All that and he ‘s a black with NO rythem. Can’t dance a lick……must be the white in him that screws things up!! (Rythem wise …. we know the rest)

  12. pdsand says:

    It’s about the same as the $3,000 credit for hiring new employees, the government’s just going to put a worthless incentive out there, in hopes that companies will willingly forgive 50-60 thousand dollars in principal plus future interest in exchange for a measly tax credit. When they don’t do it, then Obama can blame the greedy bastards and still get credit for his good intentions.
    Of course the companies the treasury already part-owns he can force them to modify their loans, and when they get in even worse financial shape because of the writeoffs, he would of course be forced to loan more treasury money in exchange for more stock for the government, and permanently entrench the government as part or full owners of some large financial companies that are perfectly willing and desperate to do the democrats’ biddings.

  13. wardmama4 says:

    The Generational Theft Act frosts me in so many damn ways I can’t even begin – but here goes:
    1) we are making it, always have, always will not because of government but in spite of it.
    2) our ARM has gone up, 2 times and it’s gone down, 2 times. And we have never missed a payment.

    And in addition to all that – we will have to pay for those people who shouldn’t be in a home – in addition to struggling to stay in our own. . .Welcome to Obamanation 2009.

    Having said that – my grandfather used the 1920s to really make himself set for life (and his children and and make his grandchildren’s start kinda nice) – he went out and bought 4 farms on the outskirts of ‘the city’. And slowly sold them off to developers (like after WWII), keeping the last one for family. In 1920 he built a home of his own – we grandkids called it the big house, my kids call it the castle (and no it is not even on the scale of today’s mini-mansions). He and my dad would take anything in payment during their lives -livestock, furniture and even food. The bookeepers hated them, but they kept going good times and bad and made a good life for their families.

    Tragically – what started at the end of my grandfathers buying spree (the New Deal) – was multiplied a thousand times over on Tuesday (The Generational Theft Act) and recovering this time is going to take a World War or decades of hard working and cutting government back to down to size.

    My children and grandchildren aren’t going to have it as good as we did – I just hope that we can keep the American dream alive in their hearts.

    To compel a man to furnish funds for the propagation of ideas he disbelieves and abhors is sinful and tyrannical. – Thomas Jefferson

  14. sheehanjihad says:

    a conservative came upon a leftist liberal democrat who was standing in front of a very flat tire on the side of the road….throwing handfuls of money on the tire from a satchel he had next to him. The conservative offered to help him by taking out the jack and the spare, but the democrat sternly told him he didnt need his help, he was fixing the problem as only he could and that tire should re inflate itself any time now…..I just sent lots of people who are smart enough to listen to me to the bank in town to bring me all of their money too so I can fix it faster! I am important! I know what’s best!! Either give me your money or get out of the way!!! And he continued to chuck wads of cash at the tire, watching it bounce off and float down the gutter and disappear down the storm drain, muttering that he knew it would work, it would just take more money!! The conservative shook his head in bewilderment, and driving away, he passed a long line of people with armloads of money headed back to help the democrat fix his emergency because he told them it was the only way it could be fixed.

    • gipper says:

      Excellent parable, sj! I especially like the ending where the sheeple blindly follow the lib.

    • proreason says:

      you’ve described it in a story form even some liberals might understand, sj

    • TwilightZoned says:

      Great parable! I knew the first time I found this site there was still intelligent life on earth. Unfortunately, elitist liberal democrats would twist and distort the truth (even this parable) to their own benefit and play the emotion card. It never ceases to amaze me the overwhelming number of democrats who vote with their emotions. But I guess when you don’t have intelligence or common sense it’s hard to vote with your mind.

    • proreason says:

      “It never ceases to amaze me the overwhelming number of democrats who vote with their emotions. ”

      One of Rush’s best insights is that outcomes don’t matter to liberals, only “intent”.

      And it must be pure chance that their “intents” so often increase YOUR taxes, while decreasing THEIRS.

    • Liberals Demise says:

      Not to mention the race card, TZ!!

    • gipper says:

      “One of Rush’s best insights is that outcomes don’t matter to liberals, only ‘intent’.”

      The road to hell is paved with good intentions.

  15. CGardner says:

    The first customer for the new plan will probably be Octomom. TMZ is reporting that she’s 10 months behind on her mortgage ($23,224.98).


  16. Wayne County (Detroit) has entire neighborhoods with rows of homes that have been foreclosed. Homes which sold as few as 3 years ago for 70-80K no longer wanted, (not necessarily dangerous areas either.. yet) and selling for 12-15K in bank sales. These were working class neighborhoods that were effectively shuttered as the auto layoffs began. With no jobs within a drivable distance, not many could afford to live there even if for free..

    The underlying problem with the banks in this area sees the liability of property taxes which as of a couple years ago are due nearly immediately or the state takes over. The taxes merely complicate the issue because they are DEMANDED first, so the resale of the property can be made only at a loss sometimes.

    The property tax of course has caused even the home owners who are paying their mortgages on time yet become late in tax paying added stress. The government gets mad if the banks will foreclose when payments are made late or not at all, yet it tightens its grip on the citizens who fail to pony up the statutory dues, and will boot em to the street.

    Sucks to be poor or rich or middle class I guess.

  17. U NO HOO says:

    Can’t we save the jobs of process servers and sheriffs that run sheriffs’ sales and auctioneers that sell fore closed property…etc.

    Everything has a down side.

    I’m half kidding.

  18. orwell2112 says:

    Housing bailout to allow 400-year mortgages, control interest rates



    • proreason says:

      Your link would be hilarious if it didn’t describe the program so accurately…

      ““Meanwhile, let’s say a person who makes $20,000 per year wants to buy a million-dollar home. Now in that circumstance, the Guaranteed Interest Payment (GIP) doctrine clause in my plan really comes in handy. Under my cap, that person could only be expected to pay $516.67 per month on his or her mortgage, which means he or she would be looking at a very manageable 572-year mortgage at a 0.6 percent interest rate.

      “The real message of my plan is that the government is here to help no matter what. If it’s not happening with the denominator, I say let’s fix the numerator.

      “Sometimes, stretching your payments out to a point well beyond your lifetime just isn’t enough, though, thanks to the laws of mathematics, although we’re looking into changing them, too. That’s why the GIP doctrine is so important, because it allows us to set individual interest rates at whatever number is required to keep consumers’ payments at 31% of their income.”

  19. retire05 says:

    As we watch Americans forced, through taxation that will come, to bail people out of their mortgage problems because they made bad decisions or lost their jobs, have we heard one word from the local tax entities that have continued to raise taxes that are usually built into escrow accounts? So when a person does buy a home for $100K, and their tax appraisal is raised 10% each year, within three years they are paying taxes on $133,100, a third more than the first tax bill. Add to that insurance premiums are based on tax appraisals, so their insurance has gone up by more than 1/3rd.

    But you will never hear Obama call for tax entities to lower their appraisals to meet the loss in value. You will never hear Obama demand that insurance rates be lowered (the insurance industry contributed handsomely to his campaign). Instead, you will hear that we need to bail out people because they are losing their homes.

    And can anyone tell me where the $300 billion that was approved in H.R. 3221 last June went? Nancy Pelosi said it would help over 400,000 home owners, yet there is never any mention of that money or how many it helped.


    Help 9,000,000, home owners? How many primary homes are owned in a nation of 303,000,000? And what percent are at risk of forclosure?

  20. mybrotherkeeper says:

    Well, at least if I carry around a tire gauge the Messiah told me my gas expenses would be virtually nil.

  21. BigOil says:

    Why even bother with all these complex wealth redistribution bills – when the direct approach would be much more efficient. Slap a Presidential Seal on a fleet of C-130’s and load em up with cash. Simply fly over all of the blighted Democrat strongholds – open the rear cargo hatch…and push out the cash.

  22. artboyusa says:

    Gee, what’s with the depressing slum picture? Can’t we please have some more inspirational shots of President LaBamba gazing meaningfully into the future? Or some of those ones where young Barry is modelling men’s fashionware? They give me hope, they do.

    Hope that we’ll someday be rid of him, that is.

    • Steve says:

      Actually, when I saw that photo I thought how it inadvertently epitomized exactly the way liberals want us to live.

      Cheek-by-jowl in cookie cutter houses, with unwatered yards, and close to public transportation — the road five feet away.

  23. Reality Bytes says:

    Fannie & Freddie?! Where you been? Oh that little thing over the summer, don’t worry about that. You’re in!

  24. proreason says:

    VERY interesting tidbit from Thomas Sowell’s column on the “housing/mortgage” crisis:

    “Both HUD and the Department of Justice began bringing lawsuits against mortgage bankers when a higher percentage of minority applicants than white applicants were turned down for mortgage loans.

    A substantial majority of both black and white mortgage loan applicants had their loans approved, but a statistical difference was enough to get a bank sued.

    It should also be noted that the same statistical sources from which data on blacks and whites were obtained usually contained data on Asian-Americans as well. But those data on Asian-Americans were almost never mentioned.

    Whites were turned down for mortgage loans more often than Asian-Americans. But saying that would undermine the reasoning on which the whole moral melodrama and political crusades were based. ”

    So, not only did your gov’t force banks to make bad loans, it picked through the available data to make sure that blacks were given preferential treatment.

    It’s the greatest financial crime of all time.

  25. proreason says:

    “With recent data showing that as much as 55% of those who get foreclosure aid end up defaulting anyway”

    investor’s business daily

  26. proreason says:

    “In a decision in 1937, Helvering v Davis, the Supreme Court upheld the constitutionality of key provisions of the new Social Security Act. Until then, the power of Congress to tax us was limited to paying for those functions of government explicitly laid out in the Constitution. This decision opened the door to government taxing us for anything the Congress could deem in the “general welfare.” In other words, anything they could pass.

    In 1938, the very next year, Fannie Mae was created, which got the government — taxpayers — into the housing business.

    Why would a mortgage originator sell a mortgage that couldn’t get paid back? Only if it could be re-sold to taxpayer backed Fannie or Freddie.

    Both went belly up last year and put under explicit government control. Their five trillion dollars in debt went right onto us taxpayers, doubling the outstanding debt of the US government.

    Now President Obama is “solving” our mortgage crisis by adding another $200 billion of taxpayer guarantees behind these two entities and, for the first time, allowing them to guarantee mortgage refinancing for more than 80 percent of the home value.

    And those who can’t make their mortgage payments will be subsidized by taxpayers to the tune of $75 billion so they can.

    A failure of capitalism? This could never happen in a country where private property was respected and people were not subsidized by government to buy what they can’t afford.

    Rather than saving the American dream, the Obama team could be bringing it to an end.

    Star Parker

    she must be racist

« Front Page | To Top
« | »