Wednesday, July 15, 2009

Reuters: Obama Mulls Rental Option for Homeowners, along with Paying Mortgages for Jobless

Wow. In my 2009 Outlier Predictions [Dec 16, 2008: 13 Outlier 2009 Predictions], I wrote

But larger than that - my prediction is Fannie/Freddie and then above and beyond that, for people who do not have 20% down and won't pay for insurance, the FHA - will wage a war against current mortgages. We'll see interest rate buydowns, we'll see principal reductions, we'll see anything and everything that basically gives a big (bleep) you to people who have been honoring the system. In return we will tell those people, well if your neighbor's house goes into foreclosure we will all suffer, so it's a necessary evil.

Obama & Co will also come up with myriad plans for buyers to suck up excess inventory - the government will be our partner. Nothing should surprise you - this will be an all out assault - we are already seeing the first inane ideas such as no appraisal refinances

But this! This is just amazing - even my wild imagination did not think we'd get to the point of the government making housing payments for the unemployed.

Further, the United States government now wants to become the largest landlord on Earth.
  • U.S. government officials are weighing a plan that would let borrowers who have fallen behind on their mortgage payments avoid eviction by renting their homes instead, sources familiar with the administration's thinking said on Tuesday. Under one idea being discussed, delinquent homeowners would surrender ownership of their homes but would continue to live in the property for several years, the sources told Reuters.
  • Officials are also considering whether the government should make mortgage payments on behalf of borrowers who cannot keep up with their home loans, tapping an unused portion of a $50 billion housing aid kitty. As part of this plan, jobless borrowers might receive a housing stipend along with regular unemployment benefits, the sources said.
Wow. Just wow.

They are obviously floating this to gauge public perception. Boy oh boy, I can only imagine what many in this country will be thinking as their money was first used to subsidize people who had no savings to turn from renters to buyers, and now will subsidize them to become renters again - but inside the home they should of never been in. So they cannot make a mortgage payment, but they can make a rental payment. That would make zero sense; unless the rental payment would be lower. Which means someone takes the hit (read: taxpayer).

Plus the concept of the government making mortgage payments for people - just not something even crossing the conceptual precept of my mind.

Why bother to work anymore... everything is handed to you. Thankfully, we can get away with this because the U.S. has more money trees growing in its fertile land than all other nations combined; money oozes from the pores of the branches nationwide. Bailout Nation now a national ethos, from corporate to individual. "I deserve mine" bumper stickers everywhere.


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