View Full Version : Regulator Rebuffs Obama Plan to Ease Housing Debt

08-03-2012, 05:22 AM
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Regulator Rebuffs Obama on Plan to Ease Housing Debt

WASHINGTON — The independent federal agency that administers Fannie Mae and Freddie Mac said on Tuesday that <u>it would not let the mortgage companies offer debt forgiveness to borrowers, again rejecting the entreaties of the Obama administration.
<span style='font-size: 14pt'>The Federal Housing Finance Agency said it had concluded after months of study that up to half a million homeowners could benefit from such a program, and that taxpayers might save $1 billion because aid recipients would be more likely to continue making mortgage payments.</span>

<u>But the agency’s acting director,</u> Edward J. DeMarco, said the benefits most likely would be much smaller — too small in his judgment to offset potential costs, including the risk that some borrowers would stop making payments in pursuit of a better deal.

Offering debt forgiveness “would not make a meaningful improvement in reducing foreclosures in a cost-effective way for taxpayers,” Mr. DeMarco said in a statement Tuesday.

The announcement is a direct rebuff to the Obama administration, which has pressed Mr. DeMarco for more than a year to let Fannie Mae and Freddie Mac join <u>nearly every other major mortgage company in offering debt forgiveness to borrowers who owe more than the value of their homes.</u>

On Tuesday, the Treasury Department immediately called for the agency to reconsider. “I do not believe it is the best decision for the country,” Timothy F. Geithner, the secretary, wrote in a public letter to Mr. DeMarco.

The decision also infuriated Congressional Democrats, while Republicans rallied to the agency’s defense. </div></div>


Krugman explains.

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Debt, Depression, DeMarco

Published: August 2, 2012 19 Comments

There has been plenty to criticize about President Obama’s handling of the economy. Yet the overriding story of the past few years is not Mr. Obama’s mistakes <span style='font-size: 14pt'>but the scorched-earth opposition of Republicans, who have done everything they can to get in his way — and who now, having blocked the president’s policies, hope to win the White House by claiming that his policies have failed.

And this week’s shocking refusal to implement debt relief by the acting director of the Federal Housing Finance Agency — a Bush-era holdover the president hasn’t been able to replace — illustrates perfectly what’s going on.</span>

.. The idea of using Fannie and Freddie has bipartisan support. Indeed, Columbia’s Glenn Hubbard, a top Romney adviser, has called on Fannie and Freddie to let homeowners with little or no equity refinance their mortgages, which could sharply cut their interest payments and provide a major boost to the economy. The Obama administration supports this idea and has also proposed a special program of relief for deeply troubled borrowers.

But Edward DeMarco, the acting director of the agency that oversees Fannie and Freddie, refuses to move on refinancing. And, this week, he rejected the administration’s relief plan.

Who is Ed DeMarco? He’s a civil servant who became acting director of the housing finance agency after the Bush-appointed director resigned in 2009.<span style='font-size: 14pt'> He is still there, in the fourth year of the Obama administration, because Senate Republicans have blocked attempts to install a permanent director. And he evidently just hates the idea of providing debt relief.</span> </div></div>

ie a rat. Krugman nails it here and no reasonable person could disagree.

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">But the DeMarco affair nonetheless demonstrates, once again, <span style='font-size: 14pt'>the extent to which U.S. economic policy has been crippled by unyielding, irresponsible political opposition. If our economy is still deeply depressed, much — and I would say most — of the blame rests not with Mr. Obama but with the very people <u>seeking to use that depressed economy for political advantage.</u></span> </div></div>

Read it here. (http://www.nytimes.com/2012/08/03/opinion/krugman-debt-depression-demarco.html?_r=1)

Extending misery for political gain. How low can you go?


08-03-2012, 06:36 AM
God bless them for blocking fascist economics.

08-03-2012, 06:44 AM
Now you may return to bashing the president over the failure of the housing market to recover, obdurately unaware apparently that something like this must take place for that to happen.

08-03-2012, 07:48 AM

The reason for no recovery is that the regime has desperately attempted to stop the bubble from deflating.

Gayle in MD
08-03-2012, 07:51 AM
As usual, Krugman nails it!

Repiglican obstructionism at a time of pressing national serious issues which they refuse to address!

I notice the Repigs have stopped whining and screaming, 'Jobs, jobs, jobs! Where are the jobs Mr President?'

Can't get away with that one now that they have blocked every single jobs bill, and every single appointment, every effort to address our crumbling infrastructure, by actually helping to creat American Jobs, that cannot be outsourced, which Bush, BTW, totally ignored for eight years. and

Repiglicans have done nothing but focus on controlling vaginas, spreading hate around to block our Gay, L. and TG Americans from their Constitutional rights, and launching absurd fear mongering, and irrational slanderous consipracy attacks against honorable Americans! PIG McCarthy would be proud!

The Repigs don't want the economy to grow, they are too busy trying to throw the next election, the only thing they actually have proven that they know how to do, by yet AGAIN, trying to block Democratic Americans from the voting booth.



08-03-2012, 01:19 PM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: LWW</div><div class="ubbcode-body">Why?

The reason for no recovery is that the regime has desperately attempted to stop the bubble from deflating. </div></div>

If you mean the real estate bubble, they've taken no appreciable steps to stop that whatsoever, and it's continuing to lose air basically all across the country (by Case-Schiller reports).

The depressed prices continue to shrink, and probably went down about 5% the past 12 months.

08-03-2012, 03:31 PM
So they really weren't giving away billions to firstti buyers or pushing mortgage writedowns?

08-03-2012, 05:46 PM
The tiny efforts (relative to the problem) sounded better than any effect they had. Totally inadequate to the task, and I stand by my characterization of them as nothing substantial.

The HAMP program had among the most disappointing results among Obama's policies.

Did it do any good? WSJ says yes, BUT...

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">
Obama’s home loan modification program nearly meets Congress’ skeptical expectations

June 07, 2012 01:00PM

The Obama administration’s Home Affordable Modification Program has saved approximately 802,000 U.S. homeowners from foreclosure as of April 2012, slightly exceeding the Congressional Oversight Panel’s expectations, according to the Wall Street Journal. The Congressional Oversight Panel, which monitored the 2008 bailout, had been critical of the HAMP program that gives underwater homeowners permanent loan modifications by paying lenders incentives. It predicted the president’s efforts would only stop between 700,000 and 800,000 foreclosures, adding in a report that HAMP was “unlikely to improve substantially in the future.” Treasury Department statistics released Wednesday showed this forecast to be fairly accurate: as of this March the program had prevented some 795,000 foreclosures and that an additional 7,000 were avoided through April.

Despite the now three-year old program’s modest successes, lack of lender participation – the subject of criticism from both parties — has limited the federal government’s ability to run through HAMP’s $30 billion budget. Thus far it’s only spent $3.23 billion. The Obama administration is now attempting to improve bank enrollment by boosting incentives. However it is also offering benefits for borrowers in equal measure by broadening enrollment criteria and extending the application deadline for an additional year. [WSJ] </div></div>

The **$30 billion** was wholly inadequate, had it been spent, and the $3 billions actually utilized is pitifully tiny.

Gayle in MD
08-04-2012, 09:38 AM
The housing bubble grew under the Bush "Ownership Society" policies, as his appointees, ignored the growing threat to our economy, and the warnings of many, many ecoonomists, as Greenspan flamed the bubble with unjustifiably low interest rates, and ignored corruption in the banking, ratings and predatory lending industries.

Bush blocked state efforts to protect themselves from predatory lending.

The housing bubble was created by CEO corruption and greed.

We are still rewarding CEO corruption and greed.

Until we restore the Glass Steagall Act, we will continue to be at risk from more corruption on Wall St., and another housing crash, from CEO greed and corruption, which is still underway.

Repiglicans as a policy, have blocked restoring Glass Steagall, and blocked changing hidden, shadow banking and investing policies which would force the banks and financial industry to maintain enough money to back up their risky and corrupted shadow practices of gambling with other people's money.


08-04-2012, 12:19 PM
So what should have been done IYHO?

08-04-2012, 12:59 PM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: LWW</div><div class="ubbcode-body">So what should have been done IYHO? </div></div>

I love it when you fake interest. At least the rest of us may benefit from his well thought out and articulate response while allowing you to insert your usual patchwork of overused buzz words. St.

08-04-2012, 01:12 PM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Stretch</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: LWW</div><div class="ubbcode-body">So what should have been done IYHO? </div></div>

I love it when you fake interest. At least the rest of us may benefit from his well thought out and articulate response while allowing you to insert your usual patchwork of overused buzz words. St. </div></div>

Nobody thought you had any idea what to do.