Obama Adopts Housing Scam

Editorial - February 18th, 2009 - Wall Street Journal

Let's focus on the plan's effect on the individual borrower. Anyone with mortgages owned or guaranteed by Fannie Mae and Freddie Mac will be able to refinance to lower rates if his mortgage is between 80% and 105% of the value of the home. This is a sweet deal that is not available, for example, to many renters looking to buy homes now. Sadly for those who deferred the gratification of homeownership, the 20% down payment has now become industry standard. But at least their taxes will allow other people to stay in homes they can't afford.

Existing borrowers who may not qualify for Fan/Fred refinancing can still receive loan modifications that move their mortgage payments down to 31% of monthly income. In either case, no effort will be made to verify that recipients of aid were truthful on their original mortgage applications. Given that mortgage fraud skyrocketed during the housing boom, and that the Obama Administration intends to assist up to nine million troubled borrowers, we can say with certainty that the unscrupulous will be among those rescued.

The final straw in this outrageous scam? It will only protect buyers for 5 years. It was Obama and his supporters who were recently screaming about how using these 'teaser' rates were unscrupulous and deceitful. Of course that was before they were trying to use American taxpayer money to make sure that the housing crisis Democrats caused was pushed back until after Barack Obama's re-election.