Sunday, February 15, 2009

Communism comes to America

Thrift regulator urges suspension of foreclosures while Obama develops mortgage aid plans

WASHINGTON (AP) — A federal regulator on Wednesday urged more than 800 thrift institutions to suspend all foreclosures, while president obama's top economic officials develop plans to keep borrowers in their homes. The Obama administration plans to spend $50 billion to combat foreclosures of owner-occupied, middle-class homes, but is divulging few details. An announcement of the administration's housing plans is expected in the coming weeks. Testifying before House lawmakers on Wednesday, Treasury Secretary Timothy Geithner said the government would provide incentives to "try to induce economically sensible restructuring of mortgages," but offered no specifics.

Welcome to communist America circa 2009.

The greedy and stupid get rewarded for purchasing homes they could not afford with government subsidized loans reducing interest rates and principal. The government is actually stepping in to the free market and altering private mortgage contracts which it has absolutly no business doing.

Furthermore, this is creating such a moral hazard that the unintended consequences and ramifications of these actions will be long lasting and astounding.

Why will the responsible people, who are now underwater on their homes also, continue to pay their bubble priced mortgages off. Yes, they do have the ability to pay and do have a down payment and credit score on the line unlike the stupid, broke, home debtors getting bailed out but that will not be enough.

A little ding on your credit score is worth it to a lot of people to get lowered principal and a lower interest rate saving them countless thousands of dollars.

Any foreclosure bailout, and sweet deals offered to the deadbeats, will simply cause more people to quit paying to get the same deal. This leads to even more tax payer money going to bail out and modify more loans and an even larger crisis.

Obama sure did give us change...but its not the kind I believe in.

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