Idiots in Washington and Their New Housing Program

October 26, 2011 05:59


It is unclear who is going bankrupt faster, troubled homeowners or the US government. Regardless, the country is slowly being bankrupted by the idiots in Washington. Einstein would pronounce these elected officials insane because they keep doing the same thing with the expectation that results will differ.

From Monty Pelerin’s World

The scam that is government continues. The latest attempt to “solve” the housing crisis is what got us into this mess in the first place. Here is Zerohedge’s take:

The core of the announced transitions to HARP revolve around allowing borrowers to refinance mortgages regardless of how underwater homes are. Of note is the “enhancement” which removes “the current 125 percent LTV ceiling for fixed-rate mortgages backed by Fannie Mae and Freddie Mac.” In other words, one can have negative equity equal to the full amount of the loan or more, and still be able to refinance into current record low mortgage rates (something which last week’s near record drop in MBA refi rates of -17% may not be too optimistic on). That said, considering HARP’s abysmal success record to date, with just 894,000 borrowers having refinanced using this subsidy program (considering anywhere between a third and half of all US mortgages are underwater), and since it is far more economic to be delinquent on one’s loans than to refinance and actually have to pay something out of pocket in these here USS of A, we expect even this latest revision to be a massive failure. In fact, the only data that matters is the public announcement on November 3 and 4th of how many tens of billions in retail “top line” the GSEs will need to be funded for by the US Treasury, because at this point one thing is all too clear: the nationalized US mortgage industry, in which ever fewer people actually make any cash payments, is nothing but a massive subsidy pass thru vehicle for domestic retailer operations.

It is unclear who is going bankrupt faster, troubled homeowners or the US government. Regardless, the country is slowly being bankrupted by the idiots in Washington. Einstein would pronounce these elected officials insane because they keep doing the same thing with the expectation that results will differ.

“Monty Pelerin” is a pseudonym derived from The Mont Pelerin Society. The man behind the pseudonym retired to Asheville, NC from a corporate and academic background. The corporate background was primarily in the corporate financial field in several CFO positions. The academic background includes AB, MBA and PhD degrees from Duke University, the University of Chicago and Syracuse University in finance and economics. College and graduate level teaching lasted about 10 years.



Help Make A Difference By Sharing These Articles On Facebook, Twitter And Elsewhere:

Interested In Further Reading? Click Here