The Obama Administration may have already announced their $275 billion mortgage bailout plan, but that doesn’t mean they have any clue as to how it will actually work. The Washington Post reports: The administration is developing a standard for lenders to use in evaluating applicants that seeks to exclude homeowners who are not in real need or are too far behind in their payments to be saved. … Government officials are working to finalize details before a self-imposed March 4 deadline when the program will go into effect and lenders …
The nation’s outrage over the never ending Bush-Obama Bailout Parade is heating up fast. This week alone we’ve seen grassroots rallies in Seattle, Denver, Mesa, and Kansas. Then yesterday, CNBC editor Rick Santelli set off a virtual firestorm when his passionate critique of President Barack Obama’s mortgage bailout plan inspired traders on the floor of the Chicago Board Options Exchange to stop their pre-trading preparations to voice their support. The video of Santelli’s call for a “Chicago Tea Party” to protest the government’s constant intervention in the free market has …
We don’t know what reality the New York Times editorial board lives in, but it is definitely not the same one Los Angels Times hard news reporters operate in. Today the NYT editorializes: In an election year, sound policy making is almost always trumped by political posturing, making the situation even bleaker. A case in point is the new foreclosure-prevention law. President Bush threatened for months to veto it, before signing it in July. The law’s main feature — allowing the government to guarantee hundreds of billions of dollars in …
Throughout the entire housing bail out debate conservatives repeatedly warned Congress not to include the creation of a $4 billion National Housing Trust Fund in the final legislative package. They didn’t listen. Now corrupt, fraudulent and partisan groups like ACORN (Association of Community Organizations for Reform Now) have a permanent source of federal funds. Don’t believe that all non-profits are as bad as ACORN? Then read today’s New York Times: Federal investigators on Monday raided the downtown offices of a city-chartered nonprofit agency accused of abusing a federally financed program …
We weren’t the only ones flabbergasted by David Broder’s recent praise for the National Housing Trust Fund. Cato Institute adjunct scholar Arnold King writes at EconLog: Broder helped ruin my day in a number of ways. First, he reminded me about this program, which I had only seen in early versions of the housing bill, and which I had been assuming was dropped in order to avoid embarrassment. Second, he praised the program effusively, because Congress is doing something about “affordable housing.” Affordable housing? We have millions of unoccupied homes …
Recently, a scandal has broken out that provides great insight into the housing crisis. Countrywide Mortgage brokers have been treating Congress to VIP lending rates. Accepting donations of $100 or more is illegal for these politicians, but scandals like this are not uncommon. The deeper question is why a profit-seeking business like Countrywide would want to offer discount rates to government officials in the first place. It is, of course, because they expect something in return. If government could not offer these businesses any preferential legislation, exemptions from taxes or …
Anticipating legislative action on a bailout for Fannie Mae and Freddie Mac in the House tomorrow, the White House reaffirmed a veto threat Monday if the proposed package includes a money for state and local governments to buy real estate. Speaker Nancy Pelosi responded, “Let me get this straight. The president is asking us to do something quite significant on the housing crisis, and he is going to prevent local government from buying up these properties?” Pelosi’s statement exemplifies the mentality on the left that makes it essential conservatives and …
The Washington Post makes a great case today for separating the left’s long sought housing bailout bill with the more pressing debate over long term reform for Fannie Mae and Freddie Mac They write today: Democratic leaders in Congress plan to attach the Fannie-Freddie rescue to housing legislation already passed by the Senate and slated for House consideration. Strangely, though, both the Senate and House versions of the bill potentially increase the very risks Mr. Paulson’s plan is intended to mitigate. Both measures would encourage Fannie Mae and Freddie Mac …
Freddie Mac and Fannie Mae own or guarantee a combined $5 trillion worth of mortgages. To put the size of that liability into perspective, remember that total U.S. federal debt is $9.5 trillion and total U.S. gross domestic product is $14 trillion. They are simply too big to fail. The trouble that Freddie and Fannie are in, however, is not a failure of capitalism. Fannie and Freddie are both artificial government creations that use their big government advantages to distort the free market. They are both remnants of the Great …
The government-sponsored entities Freddie Mac and Fannie Mae are so neck deep in the subprime housing crisis that now the White House is considering putting them into conservatorship. Despite fears that both companies do not have enough capital to cover their liabilities, the Senate passed a bill yesterday that would take even more money away from Freddie and Fannie. Heritage scholar David John explains in the New York Post: Monday’s price drop also shows how foolish it is for Congress to rely upon the two to pay for a deeply …
