President Barack Obama unveiled a $75 billion foreclosure prevention program yesterday aimed at arresting one of the root causes of the nation's economic spiral by helping as many as 9 million homeowners obtain more affordable mortgage terms.
Due to an onset of bailout fatigue our vision is blurred, our breath short and we’re a wee wobbly in the knees, but…. Must. Remain. Strong.
The splash down paragraph above represents the disconnect between most rational people and those currently pulling the strings: the root cause has nothing to do with affordable mortgage terms. The root cause has everything to do, though, with very affordable mortgage terms. How affordable? So affordable that the terms became offers that no G#d-fearing, red-blooded American could refuse.
And dig this…
A central part of the program would loosen lending standards at Fannie Mae and Freddie Mac to allow millions of homeowners to qualify for refinanced loans and take advantage of the opportunity to refinance at a time of historically low mortgage rates. Currently, many homeowners do not qualify for refinancing because the level of equity in their homes has not reached 20 percent.
Since this is a news article and not something to be taken as journalism with any degree of introspection or sense of irony, we’ll simply ask the question: Wasn’t loosening lending standards the same exact #%6@-ing thing that got us into this G!%$#&mn mess in the first place?
But the icing on the cake is John Courson, president, CEO and all-around sage of probity and common sense asking just what you would expect a man in his position to ask. Take it away, John:
But in the hardest-hit parts of the country where prices remain in a free fall, including California and Arizona, that may not be enough. “Why cap it at 105 percent (debt to market value ratio)? Why not refinance based on whatever it is?” asked John Courson, president and chief executive of the Mortgage Bankers Association.
Why not indeed, John, because if the multiplier effect of any of these bailouts or stimuli packages is anything above 1.0 which is far lower than the figure we’ve seen bandied about by the Administration, then why stop at $75 billion? Why stop at $787 billion? Why not just start cranking up the printing presses and let the good times roll?
What's that, you say? We are? Oh, never mind then.
Humble shipbuilding homeowners that do not own a credit card but are wondering just what the hell happened to all that crap our parents taught us.