Dumbya flip-flops again, to sign subprime bailout

[Porsche-O-Phile]

http://news.yahoo.com/s/ap/20080723/ap_on_go_pr_wh/congress_housing

Your tax dollars at work, saving idiots from their own indiscretions. Thank you "conservative" GWB. Thank you so much for "sending the message" that fiscal irresponsibility, recklessness, speculation and fraud will be bailed out at the expense of the government tax trough.

Nice to know where you stand. As if we didn't already.

- - - - -

President Bush drops opposition to housing bill

By JULIE HIRSCHFELD DAVIS, Associated Press Writer 1 hour, 3 minutes ago

WASHINGTON - President Bush dropped his opposition Wednesday to legislation aiming to calm the chaotic housing market despite his objections to a $3.9 billion provision. The House was expected to vote on the bill Wednesday, and it could become law as early as this week.
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Under the bill, the government would help struggling homeowners get new, cheaper loans and would be allowed to offer troubled mortgage giants Fannie Mae and Freddie Mac a cash infusion.

The Bush administration and lawmakers in both parties teamed to negotiate the measure, which pairs Democrats' top priorities — federal help for homeowners facing foreclosure and $3.9 billion for neighborhoods hit hardest by the housing crisis — with Republicans' goal of reining in mortgage giants Fannie Mae and Freddie Mac while reassuring financial markets of their stability.

Bush had objected to the $3.9 billion provision in the measure, saying that it was aimed at helping bankers and lenders, not homeowners who are in trouble.

Treasury Secretary Henry Paulson, in fact, made the same complaint in a talk Wednesday with reporters, calling it a "wasteful" provision. But he also said the agreement will send a strong message to investors around the world and will be key to helping the nation turn the corner on the housing crisis.

"This is a very important message that we are sending to investors around the world," Paulson said, adding that it would play a key role in "turning the corner" on the housing crisis.

White House press secretary Dana Perino announced Bush's switch in an earlier telephone conference call with reporters. "We believe this is not the time for a prolonged veto fight but we are confident the president would prevail in one," she said.

It hands the Treasury Department the power to extend the government-sponsored mortgage companies an unlimited line of credit and buy an unspecified amount of their stock, if necessary, to prop up Fannie Mae and Freddie Mac, two companies chartered by Congress. The two companies back or own $5 trillion in U.S. mortgages — nearly half the nation's total.

"The positive aspects of the bill are needed now to increase confidence and stability in the housing and financial markets," Perino said. "While we have concerns with other aspects of the bill, it is important that the new authorities are put in place promptly. And so President Bush will accept Secretary (Henry) Paulson's recommendation to sign the bill."

She said she expected that the $3.9 billion provision would be included in the final legislation. "With Congress scheduled soon for yet another recess," she said, "the risk of not having a bill until at best the middle of September — if they even were act then — is not a risk worth taking in the current environment."

Congressional analysts estimated Tuesday that the rescue could cost $25 billion, but predicted there's a better than even chance it won't be needed at all.

The bill would let hundreds of thousands of homeowners trapped in mortgages they can't afford on homes that have plummeted in value escape foreclosure by refinancing into more affordable, fixed-rate loans backed by the Federal Housing Administration. Lenders would have to agree to take a substantial loss on the existing loans, and in return, they would walk away with at least some payoff and avoid the often-costly foreclosure process.

The plan also creates a new regulator with tighter controls for Fannie Mae and Freddie Mac and modernizes the FHA.

It includes about $15 billion in housing tax breaks, including a credit of up to $7,500 for first-time home buyers for people who bought homes between April 9, 2008, and July 1, 2009. It also allows people who don't itemize their taxes to claim a $500-$1,000 deduction on their 2008 property taxes. That chiefly benefits homeowners who have paid off their homes and can't claim a deduction for mortgage interest.

And it increases the statutory limit on the national debt by $800 billion, to $10.6 trillion.

The White House, which initially denounced the FHA rescue as too burdensome on the government and risky for taxpayers, dropped most of its objections to the measure in recent weeks in search of a swift deal. The urgent request by Paulson to throw Fannie Mae and Freddie Mac a federal lifeline acted as a powerful locomotive for a deal.

The bill sets a cap of $625,000 on the loans that Fannie Mae and Freddie Mac may buy and the FHA may insure. It lets them buy and back mortgages up to 15 percent above the median home price in certain areas.

Lawmakers abandoned efforts to place conditions on any Fannie and Freddie rescue, but the bill hands the new regulator approval power over the pay packages of executives at the companies regardless of whether the government moves to financially reinforce them.

It also counts any federal infusion for the mortgage giants under the debt limit, essentially capping how much the government could spend to stabilize the companies without further approval from Congress. As of Tuesday, the national debt that counts toward the limit stood at about $9.5 trillion, roughly $360 billion below the statutory ceiling.

[Pazuzu]

Originally Posted by Porsche-O-Phile

Nice to know where you stand. As if we didn't already.

He's going to kowtow to the Legislature next, and drop all interest in more offshore drilling

[Jim Richards]

socializing risk is a core value of this congress and administration.

[Shaun @ Tru6]

Republican Deregulation = huge tax hikes for Consumers while saving Corporations that should be left to fail.

Democrats don't hold a candle to Republican screw-ups that cost this country $billions with no ROI.

[lendaddy]

Originally Posted by Shaun 84 Targa

Republican Deregulation = huge tax hikes for Consumers while saving Corporations that should be left to fail.

Democrats don't hold a candle to Republican screw-ups that cost this country $billions with no ROI.

lol, the solution to a Republican acting like a Democrat is a Democrat acting like a Democrat?? You think Obama would veto this lol

We conservatives are terribly embarrassed of the liberal economic actions of Bush, make no mistake.

[JayG]

Originally Posted by lendaddy

lol, the solution to a Republican acting like a Democrat is a Democrat acting like a Democrat?? You think Obama would veto this lol

We conservatives are terribly embarrassed of the liberal economic actions of Bush, make no mistake.

x2.

[kstar]

Bush is not a traditional republican.

He flopped over to his democratesque "spending and entitlement" ways many years ago.

[speedracing944]

I feel betrayed by the Republican party. Is there no hope?

Speedy

[Shaun @ Tru6]

Originally Posted by lendaddy

lol, the solution to a Republican acting like a Democrat is a Democrat acting like a Democrat?? You think Obama would veto this lol

We conservatives are terribly embarrassed of the liberal economic actions of Bush, make no mistake.

Democrats tax and spend. You know what you are getting. No surprises, predictable.

Republicans, deregulate, borrow and spend. You think things are going great even though you are living beyond your means, then the bubble bursts, and everyone has to clean up the mess, hit with twice the economic destruction of just tax and spend.

isn't reality great.

[Rick Lee]

I'm not sure which is worse - that Bush is going along with this or that he and Paulson think for one second that $3.9 billion is more than a drop in the bucket wrt the amount of money at stake in looming foreclosures. It will make no difference. Sure, they can expand FHA guidelines to allow some folks to refi into FHA. But from what I've heard, only those who are current on their payments qualify for this. And those who do it will have to pay back some money to the gov't. if they eventually make some money on the sale of their house. This is another feel-good, do-nothing measure.

[Porsche-O-Phile]

Maybe I'm the crazy one, but I think honesty - brutal honesty - should trump all other considerations in overall economic policy. That's just me, but if irresponsible people want to make stupid choices, the only way - the ONLY way - they're ever going to learn is if they are forced to deal with the consequences of them. This is the ONLY way we're ever going to be collectively smarter as a society and instill truly sustainable ways of thinking into people.

This is the reason I'm so passionately adamant about this issue - I see NOTHING in the recent housing markets other than absolute stupidity, greed run amok, etc. and now everyone is running for cover and trying to get funky with numbers, rules, reporting methods, etc. in order to duck the consequences. This is the SAME core difference that divides conservatives and liberals on so many other issues - the notion of "accountability". Call it that, or call it "tough love" or call it "brutal honesty" or call it "dealing with the consequences". Heck, you can even call it "being a mean evil d1ck" (like a lot of the people who love to try to duck it might call it). The fact of the matter is that the ONLY thing that gets through to people is consequences.

I have a favorite saying that I use a lot at work, "good judgment comes from experience, and experience comes from bad judgment". This is a way of saying that mistakes are not bad in and of themselves, but they only benefit us if we learn from them. And the only way we're going to learn from them is if we get our hands slapped when we screw up.

Personally, if the outcome of the stupidity of the last few years is a full-blown depression, I'd actually prefer that to the mamby-pamby, dishonest B.S. that's being spun onto the public right now from government, financial institutions, etc. We made our beds - we should lie in them to make damn sure we don't end up in the same situation again.

I think it'd be a really interesting discussion to have as to whether the current-day mindset of "do whatever you want without consequence" is a cause or an effect of having a "manipulated" economy for the last 80-or-so years and no resulting major Depression/failure. Yes, the Great Depression was brutal, but there weren't a helluva lot of irresponsible doofuses running around afterwards - because people had the scars. They remembered. And they made responsible choices. And life was good.

Sorry, but we can't keep coddling the stupid and expect responsible/sustainable philosophies to emerge. You just can't teach that. I'm a believer in the lessons of the University of Hard Knocks.

[Jim Richards]

Originally Posted by Porsche-O-Phile

The fact of the matter is that the ONLY thing that gets through to people is consequences.

By continually socializing risk, we, as a society, are inadvertently joining the idiots that populate the shallow end of the gene pool. We, as a society, are vying for the Darwin Award. Is that what we really want for ourselves?

[Rick Lee]

We can completely forget about an honest discussion happening among our elected officials. The small handful of them who actually understand this stuff still wouldn't risk being painted as a socialist or cold-hearted conservative. IMHO, FHA is the only extent to which the feds should get involved. FHA is pretty well-insured through their own MIP program. So loosening up their guidelines to accomodate refis would not be as bad as telling banks to write down loans by whatever percent. Who pays for that in the end? Kinda ironic that in the past folks used FHA to get into their first house and then refi'ed into a conventional loan to shed the MIP. Now it's going to be the opposite.

[Jim Richards]

Originally Posted by rick Lee

we Can Completely Forget About An Honest Discussion Happening Among Our Elected Officials. The Small Handful Of Them Who Actually Understand This Stuff Still Wouldn't Risk Being Painted As A Socialist Or Cold-hearted Conservative.

+1

[Shaun @ Tru6]

Originally Posted by Porsche-O-Phile

...I see NOTHING in the recent housing markets other than absolute stupidity, greed run amok, etc. and now everyone is running for cover and trying to get funky with numbers, rules, reporting methods, etc. in order to duck the consequences. This is the SAME core difference that divides conservatives and liberals on so many other issues - the notion of "accountability". Call it that, or call it "tough love" or call it "brutal honesty" or call it "dealing with the consequences". Heck, you can even call it "being a mean evil d1ck" (like a lot of the people who love to try to duck it might call it). The fact of the matter is that the ONLY thing that gets through to people is consequences.

I have a favorite saying that I use a lot at work, "good judgment comes from experience, and experience comes from bad judgment". This is a way of saying that mistakes are not bad in and of themselves, but they only benefit us if we learn from them. And the only way we're going to learn from them is if we get our hands slapped when we screw up.

Jeff, the housing crisis is based on a combination of Deregulation, Greed and Stupidity, the first two relying on the last.

I believe that every home owner who over-extended themselves should have their home repossessed. But they aren't the ones who caused the situation.

let me ask you this: Does your company ship products or perform services for customers who you know cannot pay you for them? If it does, does it also expect the government to cover your losses when your customers don't pay up after you've shipped?

The fact is that mortgage/banking deregulation in cooperation with a lazy/blind eye Fed and SEC, allowed those at the very top in banking and investment speculation to give bad loans and then create exotic investment packages and make huge amounts of $ off of basic bad loans.

Take the stupid people's homes away, we're in agreement there. But instead of TAXING the American People for a deregulation error, I want to see those investment banks, any that made $ off of these loans, pay up, right down to putting all the new 997s on the block to cover the losses.

[Rick Lee]

Originally Posted by Shaun 84 Targa

I believe that every home owner who over-extended themselves should have their home repossessed. But they aren't the ones who caused the situation.

Do you bother to think about this stuff before you post it? Plenty of homeowners, who are either "over-extended" (by whose definition?) or upside down on their mortgage, are still making their payments on time. Why should they lose their houses? Who would repossess them, on what grounds and how would that benefit a single person or business financially? Are you kidding me? Tell me you'd like to see houses in your neighborhood foreclosed. That would drop your value like a rock, could make you over-extended and then you'd be one of those idiots you so decry.

[Shaun @ Tru6]

Originally Posted by Rick Lee

Do you bother to think about this stuff before you post it? Plenty of homeowners, who are either "over-extended" (by whose definition?) or upside down on their mortgage, are still making their payments on time. Why should they lose their houses? Who would repossess them, on what grounds and how would that benefit a single person or business financially? Are you kidding me? Tell me you'd like to see houses in your neighborhood foreclosed. That would drop your value like a rock, could make you over-extended and then you'd be one of those idiots you so decry.

Jesus, Rick, I hope I don't have to explain that over-extended means in default in the context of Jeff's and my post. I'm sorry for being imprecise in my language.

yes, people who are making their payments, they get to keep their homes. Other people who aren't making their payments, not so much.

[Porsche-O-Phile]

Yea, nobody's saying people shouldn't have the right to be stupid (to overpay for things, to over-extend themselves, etc.) They just absolutely shouldn't have the right to expect/count on Uncle Dubya and his checkbook to ride to the rescue every time they do. If they take a risk, ACCEPT that risk (that's the important part) and happen to get lucky and end up ahead, more power to 'em. However, if they lose (as the odds say they will) they MUST be forced to deal with the ramifications of it.

That whole "free market" is a wonderful thing when it's allowed to actually work its magic without people thinking they can out-think it and manipulate it, massage it and spin it into a magic producer of endless riches for all. This kind of stupid economic alchemy experimentation on the part of our so-called "leaders" has to stop. It's ultimately only going to end one way anyhow...

[Rick Lee]

But people who stop paying DO lose their homes. That's already the rule and it happens every day. It's just that there are so many of them now that it takes banks maybe 12-18 mos. to get around to foreclosing. Who do you suggest should make it go faster? Hey, I'm all in favor people facing consequences too. But would you rather have a house in your neighborhood occupied by deadbeats who are otherwise decent neighbors, cut their grass, keep the place up, etc., or have it sit vacant until the banks get around to doing something?

[Jims5543]

Is it too late for me to refinance my house to the hilt, overextend myself beyond my limits and cash in on this?