et with it, Mr. President. This is your moment to one-up Barney Frank and the Democrats. Create a Reconstruction Mortgage Corporation. Or, at the least, modify the existing FHA program, long discarded as ineffective. Bail ’em out — and prevent a destructive housing deflation that Ben Bernanke cannot avert. After all, you’re the Decider, aren’t you?
And here are more Dems climbing aboard the housing gravy train:
Congressional Democrats have been ratcheting up calls for tighter regulation, and even the possibility of bailouts for distressed homeowners.
Although Mrs. Clinton and Mr. Edwards have both proposed a fund to help homeowners, the focus in Congress has been on expanding the ability of government-sponsored companies like Fannie Mae and Freddie Mac to finance more home loans.
Senator Charles E. Schumer of New York and Senator Dodd have both proposed raising the caps on the volume of mortgages that Fannie Mae and Freddie Mac can hold in their own portfolios.
Both companies package mortgages into securities that can be sold on Wall Street and into world financial markets. But the companies also hold millions of mortgages in their own portfolios. Under current regulations, the companies are each allowed to keep about $700 billion in mortgages, and neither has much room to acquire more loans. Democrats contend that Fannie Mae and Freddie Mac could provide a crucial source of refinancing for people trying to extricate themselves from unmanageable loans.
But the Fed and the Treasury Department have argued that the two companies’ portfolios have effectively become government-sponsored behemoths that crowd out private lenders and could pose big risks to taxpayers if their holdings plunged in value.
The mortgage blogger at Another F*ed Borrower says “I told you so” and notes that LA Democrat City Councilman Richard Alarcon has also joined the mob:
I told you it was only a matter of time until the politicians started talking BAILOUT for people that bit off more than they could chew. They can’t have it both ways (or can they). They can’t have 70% ‘home ownership’ (more like home mortgageship) on one hand, and then use taxpayer money to say that nobody loses a house on the other. The thing is, 70% of the population probably shouldn’t be owning a house, and certainly not at the prices that many of them paid. The coming ‘foreclosure boom’ is going to realign the home ownership percentages to more realistic levels and realign housing prices to levels that reflect incomes…
…pparently, biting off more than one can chew is no longer an individual problem, it is society’s problem. Who knew that the ‘leaders’ of our country were so against personal responsibility. Aside from the capital gains tax, ‘society’ didn’t really benefit from the massive property appreciation, so why should society have to foot the bill for the ‘bad investments’ that were made.
Sadly, it isn’t just politicians on the national level that are screaming BAILOUT! Seems that Los Angeles City Councilman Richard A[l]arcon wants CITY, STATE, and FEDERAL funds to bailout CITY homeowners that cannot afford their mortgages!!
Insane: Take from responsible taxpayers and give to homeowners who made bad investments and are up to their eyeballs in debt.
It’s the Democrat way.