Inquiring minds are
reading the complete text of President Obama's State of
the Union Address to see what distortions, lies, and
hypocrisy it contains.
I found a nice Orwellian set of paragraphs smack in the middle of his speech.
while Government can’t fix the problem on its own, responsible
homeowners shouldn’t have to sit and wait for the housing market to hit
bottom to get some relief.
That’s why I’m sending this Congress a plan that gives every
responsible homeowner the chance to save about $3,000 a year on their
mortgage, by refinancing at historically low interest rates. No more red
tape. No more runaround from the banks. A small fee on the largest financial
institutions will ensure that it won’t add to the deficit, and will
give banks that were rescued by taxpayers a chance to repay a deficit of
Let’s never forget: Millions of Americans who work hard and play by the
rules every day deserve a Government and a financial system that do the same.
It’s time to apply the same rules from top to bottom: No bailouts, no
handouts, and no copouts. An America built to last insists on responsibility
Top to Bottom: More
Bailouts, More Handouts, More Copouts
While reading the first paragraph above I knew without a doubt a huge bailout
proposal was coming up.
Sure enough, the very next paragraph contained a massive bailout proposal and
in more ways than is readily apparent at first glance. For starters "responsible
homeowners" don't need mortgage relief. Secondly, $300 a month is a
lot of dough so I would like to see an accounting.
Finally, and most importantly, every loan that is refinanced will be paid off
in full. Thus, any bank, hedge fund, mortgage provider, or GSE that is paid
off on a nonperforming loan will be immediately made whole.
This is a massive backdoor bailout of banks, mortgage companies, hedge funds,
foreign banks, and anyone else holding mortgage related garbage.
In case you were wondering about the big rally in bank shares this year, this
proposal just might have something to do with it.
The Orwellian irony of it all comes in the third paragraph with Obama's
bald-faced lie "It’s time to apply the same rules from top to
bottom: No bailouts, no handouts, and no copouts."
How the Taxpayer Ripoff Works
The New York Times explains the ripoff in President to Offer Way for
Easing Home Debt
White House plans to propose legislation that could allow a few million
homeowners to reduce monthly mortgage payments by refinancing their current
loans into new ones guaranteed by the Federal Housing Administration.
The program would broaden the availability of government-backed mortgages to
include many borrowers whose loans are held by private companies and who have
been unable to persuade those lenders to reduce their interest rates.
Existing federal programs focus mostly on borrowers whose loans are owned by
The new program will be directed at people whose mortgage debts exceed the
value of their homes, according to a senior administration official who spoke
on the condition of anonymity because the details have not yet been
finalized. The official estimated that the program could benefit two million
to three million homeowners who have loans that are not guaranteed by the
government, and that the program’s cost would not exceed $10 billion.
$10 Billion?! Really?
The proposal as outlined rates to take every
underwater mortgage held by banks, Fannie Mae, Freddie Mac, hedge funds,
foreign banks, and pension plans, and transfer all of them to the FHA.
The idea this will only cost $10 billion is absurd.
The "small fees on the largest financial institutions" are
absolutely guaranteed to not cover the cost of this monstrous proposal.
Indeed there is something in Obama's proposal for everyone except
"Let’s never forget: Millions of Americans who work hard and
play by the rules every day" will be royally screwed by Obama's
proposition in the form of higher taxes down the road.