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"The housing legislation is the latest in a series of extraordinary interventions this year by the Bush administration, Congress and the Federal Reserve as they seek to limit the risk that shockwaves in the housing sector will ripple across the American economy and the world financial system. In the process, the central bank and taxpayers have taken on what critics warn are incalculable liabilities and risk.
"The housing bill grants the Treasury Department broad authority to safeguard the nation’s two mortgage finance giants, Fannie Mae and Freddie Mac, potentially by spending tens of billions in federal money to prevent the collapse of the companies, which own or guarantee nearly half of the nation’s $12 trillion in mortgages."
What this paragraph means is, “These government organizations are too big to fail, so we’re taxing the crap out of you - to the tune of trillions of dollars - to keep them artificially alive.”
"To accommodate the rescue plan for the mortgage companies, the bill raises the national debt ceiling to $10.6 trillion, an increase of $800 billion and the first time that the limit on the government’s credit card has grown to 14 digits."
This bill strives to interfere with market economics, artificially propping up institutions that by rights should fail. But something else amuses me and its a philosophical issue more than a financial one:
Look at what our government is doing to save companies and people and their little houses. Look at it. Now, why doesn’t the government swoop in and make these same guarantees for renters? I know why. Because there is something special about owning a house. It’s usually the largest purchase of a person’s lifetime, and there are all sorts of good feelings associated with owning something. When I am feeling cynical, I think that good feelings are not a good enough reason to bulk up my tax bill. But when I am feeling like maybe there is hope for America, I assign a motive to the legislature that probably, in all reality, does not exist: I hope that they’re saying that without property rights no other rights can exist, and thus its important to give property rights to as many people as possible. Even that is flawed, of course. One must earnproperty, and so if you can’t afford it, you don’t get it. And I’ve never known government to add laws to the books in order to spread liberty throughout the country. But it’s a nice thought, and that, apparently, counts for a lot these days. Coupla trillion, in fact.
Source: Reported by Cara Ellison http://caraellison.wordpress.com/
Posted July 26th, 2008 by Armen Hareyan
housing/mortgage crisis and recent leglislation
I just learned from an employee of Citimortgage that a substantial number of foreclosures in the Bay Area are a direct result of their lending money to illegal aliens with artificial T.I.N. numbers only to foreclose on those loans when the adjustable rate mortgages went up and the illegals tried to re-finance. thise undocumented aliens who applied for home loans using these illegal T.I.N. #s were unable to refinance in the more restricted loan market because of their undocumented status and because in the second instance, their illegal T.I.N. numbers were discovered, while having been conveniently overlooked in the first instance.
Is the Federal Government also going to bail out those illegal aliens who defrauded the mortgage companies...lenders who were too greedy or lazy or irresponsible to check the status of these undocumented aliens...aliens who seem to delight in flaunting our laws and avert paying taxes so as to bleed our economy for their own self serving ends?
Why should we as taxpayers put up with this nonsense? And why should current homeowners who have been responsible and diligent about paying our mortgages be penalized with higher interest rates because the banks are now failing due to their own lack of due diligence, and refuse to lower the mortgage rates to help those of us who still have loans, reduce our mortgage payments?
Who determines the prevailing mortgage interest rates? And why are they not coming down along with the Fed interest rates?
Where is David Baldacci and why hasn't he written an other bestseller regarding the covert manipulation of the mortgage interests rates?
I'm really tired of living in a hispanic (or Russian) world where I am treated as a second class citizen and required to learn espagnol (or russian) in order to survive in my own country.
Am I the only one who has a problem with this and with the bank's policies to lend to illegals and this Country's current policy to allow them to have T.I.N. numbers, drivers licenses, own homes and skate under the radar of our laws?