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Obama’s mortgage loan effort ’caused more harm than good’

mortgage meltdown war next

It looks like Obama is continuing his work at bankrupt ACORN. The government shouldn’t have poor people to sign mortgages for the houses they couldn’t afford in the first place. What an insult to the millions of prudent home owners who bought what they could afford and made all the payments. Now they are asked to pay for those who did exactly the opposite. Obama is no leader, he’s a politician. What will now happen with the US economy in taters?

To many the true success of Keynesian policy can be seen at the onset of World War II which provided a kick start to the world economy, removed uncertainty, and forced the rebuilding of destroyed capital.

War is the biggest consumer market. It is also the biggest racket according to many including Smedley Butler. The supply and demand of people, planes, ships, tanks, and so on make for a huge necessity of a large manufacturing base. In war the market economy is killed, destroyed or used up continuously. You could say that was the goal last stimulus package of the New Deal. So how far do you want to go to make stimulus work to fix a flawed and faulty economic system based on debt?

U.S. Loan Effort Is Seen as Adding to Housing Woes
PETER S. GOODMAN The New York Times January 2, 2010

The Obama administration’s $75 billion program to protect homeowners from foreclosure has been widely pronounced a disappointment, and some economists and real estate experts now contend it has done more harm than good.

Since President Obama announced the program in February, it has lowered mortgage payments on a trial basis for hundreds of thousands of people but has largely failed to provide permanent relief. Critics increasingly argue that the program, Making Home Affordable, has raised false hopes among people who simply cannot afford their homes.

As a result, desperate homeowners have sent payments to banks in often-futile efforts to keep their homes, which some see as wasting dollars they could have saved in preparation for moving to cheaper rental residences. Some borrowers have seen their credit tarnished while falsely assuming that loan modifications involved no negative reports to credit agencies.

Read entire article

A little history about this “act of hope” by Obama

Obama unveils $75B US mortgage relief plan
Last Updated: Wednesday, February 18, 2009 | 1:01 PM ET

U.S. President Barack Obama unveiled a $75-billion US plan to grapple with the housing crisis that has seen Americans reeling from foreclosures and tumbling home values.

“The American dream is being tested by a home mortgage crisis that not only threatens the stability of our economy but also the stability of families and neighbourhoods,” Obama said during a speech at a high school in Mesa, Ariz.

“It’s a crisis that strikes at the heart of the middle class,” he said.

The rescue plan is engineered to help up to five million Americans refinance their mortgages on properties that are “under water” — or worth less than the amount owed on the mortgage.

The plan will also contain incentive payments for lenders to give help to up to four million borrowers at risk of foreclosure. The aid is meant to cut homeowners’ monthly mortgage payments back to no more than 31 per cent of their income.

The White House said it will also boost its financial lifeline to Fannie Mae and Freddie Mac, the two U.S. mortgage giants that the administration of former president George W. Bush took over in 2008. The White House said it would now absorb losses of up to $200 billion US at each company.

“All of us will pay an even steeper price if we allow this crisis to continue to deepen,” Obama said.

The housing bailout comes one day after Obama signed a $787-billion US stimulus package into law at a ceremony in Denver. The package, which includes tax cuts, plus money for infrastructure spending, is meant to preserve or create about 3.5 million jobs. Money is also earmarked for education, green technology and health care.

Since the U.S. economy skidded into recession in December 2007, it has lost an estimated 3.6 million jobs.

Obama unveiled his plan on the same day that the U.S. Commerce Department said housing starts and applications for building permits for January fell to record lows.

You can read the rest of the story from CBC News

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