Dec 21, 2011

More free money: Our morning giggle

The Federal Housing Administration to the rescue.

The victim is a fellow who signed up for a mortgage he couldn't afford, especially after his $400,000 house became a $200,000 house, the transmission fell out of his nothing-down Escalade, and his local taxing authorities decided hiking his property taxes was a sterling idea.

So he declares bankruptcy after the bank starts foreclosing on his house.  Enter the forces of virtue, led at this point in history by one Barack Obama and Benjamin Bernanke, screaming the battle cry of the early 21st Century: "Buck up Boy; we gawn hep y'all."

The FHA is directing this foray. Get a foreclosure notice on your underwater house, declare Chapter 13 bankruptcy, and Uncle Washington will see that you get to keep living in your McMansion essentially free.

"The plan under review by the Federal Housing Finance Agency would call for the mortgage financing companies to allow bankrupt homeowners who owe more on their housing debt than their homes are worth to pay zero per cent interest for five years..."  

Zero per cent is a handsome deal for  these folks in the early years of  30- or 40-year mortgage when the interest eats up about 99 per cent of the monthly payment. You get to keep enjoying your travertine and water view for -- what? -- fifty bucks a month or so, whatever the payment allocation to principle happens to be. Plus property tax, of course.

This is utopia and we should all be for it. Only soreheads would remark that banks,  being what they are,  would demand someone replace five years of lost interest and that politicians would shout, "Yes. Too Big to Fail."  So the discount window at the Fed would open wider, shoveling money (so to speak) to  them and to Freddy and Fannie.

But, errrr, the Fed doesn't have any money, Mr. Sorehead observes. What a fool he is. Who in his right mind would Wiki-Wander through entries  such as "fractional reserve banking" and "high-speed printing presses" and "Wiemar,"  and so forth. Only subversive bastards, that's who.


A qualification: This may be very slightly too harsh on Mr. Foreclosed Consumer. After all, he just did what his government and the great financiers told him he should, going back at least as far as the time of Monica Lewinsky and the Community Development Reinvestment Act. And continuing right down to the present day of  His Ineptness the President, John Corzine,  and  sidekick Ben. 

Mr. Consumer had,  just as you and I do, a complete, sincere, and child-like trust in the wisdom of his betters. 


Jinglebob said...

Okay, just throwing this stuff out there but how about this....People who can't make the payments get out and the government houses them in a slightly less wonderful, tho' weather proof housing, like ...a tent, or some such, and the house they can no longer pay for, will go to the auction market and whomever can pay for it will. Cash or the equivalent. So, what's wrong with that plan?Also, how about they start selling all that Federal property in Wyoming and Nevada to the highest bidders to pay off the government debts? Or put it up for homesteading as they did in the days of my forefathers?

Jim said...

No idea as close to reality as yours could possibly penetrate the minds of those who run Washington and its Wall Street subsidiary. (Hmmm ... it might be the other way around.)

As an example: For decades I've been petitioning our government to buy all the Outback for which the Australians have no real use. It's an economy move even if we overpay Canberra.

We build a good fence around it and load it up with the population of our prisons. Every transported felon gets a shelter half, a shovel, a few gallons of water,a goat, and a survival manual. A regiment of our troops rotates in for "training in desert warfare" around the perimeter.

But do they listen to me? Nope.

dennisranch said...

Well, I think you should run for some high federal office on just that idea alone. My goodness, anyone bright enough to conceive of such a wonderful idea could do end of good in DC!
Word verification is ookehadd, which I think is Lakota for , smartass!