Minority families in forclosure should get a free home

[Kramer]

yup, just give them their home and be done with it.

http://www.breitbart.com/article.php?id=D9HNEND00&show_article=1


Nearly 50 percent leave Obama mortgage-aid program

WASHINGTON (AP) - Nearly half of the 1.3 million homeowners who enrolled in the Obama administration's flagship mortgage-relief program have fallen out.

The program is intended to help those at risk of foreclosure by lowering their monthly mortgage payments. Friday's report from the Treasury Department suggests the $75 billion government effort is failing to slow the tide of foreclosures in the United States, economists say.

More than 2.3 million homes have fallen into foreclosure since the recession began in December 2007, according to foreclosure listing service RealtyTrac Inc. Economists expect the number of foreclosures to grow well into next year.

"The government program as currently structured is petering out. It is taking in fewer homeowners, more are dropping out and fewer people are ending up in permanent modifications," said Mark Zandi, chief economist at Moody's Analytics.

Besides forcing people from their homes, foreclosures and distressed home sales have pushed down on home values and crippled the broader housing industry. They have made it difficult for homebuilders to compete with the depressed prices and discouraged potential sellers from putting their homes on the market.

Approximately 630,000 people who had tried to get their monthly mortgage payments lowered through the government program have been cut loose through July, according to the Treasury report. That's about 48 percent of the those who had enrolled since March 2009. And it is up from more than 40 percent through June.

Another 421,804, or roughly 32 percent of those who started the program, have received permanent loan modifications and are making their payments on time.

RealtyTrac reported that the number of U.S. homes lost to foreclosure surged in July to 92,858 properties, up 9 percent from June. The pace of repossessions has been increasing and the nation is now on track to having more than 1 million homes lost to foreclosure by the end of the year. That would eclipse the more than 900,000 homes repossessed in 2009, the firm says.

Lenders have historically taken over about 100,000 homes a year, according to RealtyTrac.

Zandi said the government effort will likely end up helping only about 500,000 homeowners lower their monthly payments on a permanent basis. That's a small percentage of the number of people who have already lost their homes to foreclosure or distressed sales like short sales—when lenders let homeowners sell for less than they owe on their mortgages.

Zandi predicts another 1.5 million foreclosures or short sales in 2011.

"We still have a lot more foreclosures to come and further home price declines," Zandi said. He said home prices, which have already fallen 30 percent since the peak of the housing boom, would drop by another 5 percent by next spring.

Many borrowers have complained that the government program is a bureaucratic nightmare. They say banks often lose their documents and then claim borrowers did not send back the necessary paperwork.

The banking industry said borrowers weren't sending back their paperwork. They also have accused the Obama administration of initially pressuring them to sign up borrowers without insisting first on proof of their income. When banks later moved to collect the information, many troubled homeowners were disqualified or dropped out.

Obama officials dispute that they pressured banks. They have defended the program, saying lenders are making more significant cuts to borrowers' monthly payments than before the program was launched. And some of the largest mortgage companies in the program have offered alternative programs to those who fell out.

Homeowners who qualify can receive an interest rate as low as 2 percent for five years and a longer repayment period. Those who have successfully navigated the program to reach permanent modifications have seen their monthly payments cut on average by about $500.

Homeowners first receive temporary modifications and those are supposed to become permanent after borrowers make three payments on time and complete all the required paperwork. That includes proof of income and a letter explaining the reason for their troubles. But in practice, the process has taken far longer.

The more than 100 participating mortgage companies get taxpayer incentives to reduce payments. As of mid-June only $490 million had been spent out of a potential $75 billion the government has made available to help stem the wave of foreclosures.

[Kramer]

Give em a new Chevrolet too.

[Christians4LessGvt]

it's the same ole story
many of these people had no business getting a home
stupid white guilt played into making moronic decisions/laws
but the good ole Barney Frank Leftists tried to live in fantasy land
when reality hit they continued to pretend reality didn't exist
aweeee poor babies...let 'em stay in their house they couldn't afford
put off the pain...spend more of someone else's money
put off the dental work until it's on fire, needs a root canal, and costs more
same story is going on right now with Iran
put off the pain...let 'em get nukes...and boom eventually it will be much more pain/costly
same ole song and dance!

[Kramer]

it's the same ole story
many of these people had no business getting a home
stupid white guilt played into making moronic decisions/laws
but the good ole Barney Frank Leftists tried to live in fantasy land
when reality hit they continued to pretend reality didn't exist
aweeee poor babies...let 'em stay in their house they couldn't afford
put off the pain...spend more of someone else's money
put off the dental work until it's on fire, needs a root canal, and costs more
same story is going on right now with Iran
put off the pain...let 'em get nukes...and boom eventually it will be much more pain/costly
same ole song and dance!

saying such things are not politically correct.

The Emperor's New Clothes
Denmark

Many years ago there lived an emperor who loved beautiful new clothes so much that he spent all his money on being finely dressed. His only interest was in going to the theater or in riding about in his carriage where he could show off his new clothes. He had a different costume for every hour of the day. Indeed, where it was said of other kings that they were at court, it could only be said of him that he was in his dressing room!

One day two swindlers came to the emperor's city. They said that they were weavers, claiming that they knew how to make the finest cloth imaginable. Not only were the colors and the patterns extraordinarily beautiful, but in addition, this material had the amazing property that it was to be invisible to anyone who was incompetent or stupid.

"It would be wonderful to have clothes made from that cloth," thought the emperor. "Then I would know which of my men are unfit for their positions, and I'd also be able to tell clever people from stupid ones." So he immediately gave the two swindlers a great sum of money to weave their cloth for him.

They set up their looms and pretended to go to work, although there was nothing at all on the looms. They asked for the finest silk and the purest gold, all of which they hid away, continuing to work on the empty looms, often late into the night.

"I would really like to know how they are coming with the cloth!" thought the emperor, but he was a bit uneasy when he recalled that anyone who was unfit for his position or stupid would not be able to see the material. Of course, he himself had nothing to fear, but still he decided to send someone else to see how the work was progressing.

"I'll send my honest old minister to the weavers," thought the emperor. He's the best one to see how the material is coming. He is very sensible, and no one is more worthy of his position than he.

So the good old minister went into the hall where the two swindlers sat working at their empty looms. "Goodness!" thought the old minister, opening his eyes wide. "I cannot see a thing!" But he did not say so.

The two swindlers invited him to step closer, asking him if it wasn't a beautiful design and if the colors weren't magnificent. They pointed to the empty loom, and the poor old minister opened his eyes wider and wider. He still could see nothing, for nothing was there. "Gracious" he thought. "Is it possible that I am stupid? I have never thought so. Am I unfit for my position? No one must know this. No, it will never do for me to say that I was unable to see the material."

"You aren't saying anything!" said one of the weavers.

"Oh, it is magnificent! The very best!" said the old minister, peering through his glasses. "This pattern and these colors! Yes, I'll tell the emperor that I am very satisfied with it!"

"That makes us happy!" said the two weavers, and they called the colors and the unusual pattern by name. The old minister listened closely so that he would be able say the same things when he reported back to the emperor, and that is exactly what he did.

The swindlers now asked for more money, more silk, and more gold, all of which they hid away. Then they continued to weave away as before on the empty looms.

The emperor sent other officials as well to observe the weavers' progress. They too were startled when they saw nothing, and they too reported back to him how wonderful the material was, advising him to have it made into clothes that he could wear in a grand procession. The entire city was alive in praise of the cloth. "Magnifique! Nysseligt! Excellent!" they said, in all languages. The emperor awarded the swindlers with medals of honor, bestowing on each of them the title Lord Weaver.

The swindlers stayed up the entire night before the procession was to take place, burning more than sixteen candles. Everyone could see that they were in a great rush to finish the emperor's new clothes. They pretended to take the material from the looms. They cut in the air with large scissors. They sewed with needles but without any thread. Finally they announced, "Behold! The clothes are finished!"

The emperor came to them with his most distinguished cavaliers. The two swindlers raised their arms as though they were holding something and said, "Just look at these trousers! Here is the jacket! This is the cloak!" and so forth. "They are as light as spider webs! You might think that you didn't have a thing on, but that is the good thing about them."

"Yes," said the cavaliers, but they couldn't see a thing, for nothing was there.

"Would his imperial majesty, if it please his grace, kindly remove his clothes." said the swindlers. "Then we will fit you with the new ones, here in front of the large mirror."

The emperor took off all his clothes, and the swindlers pretended to dress him, piece by piece, with the new ones that were to be fitted. They took hold of his waist and pretended to tie something about him. It was the train. Then the emperor turned and looked into the mirror.

"Goodness, they suit you well! What a wonderful fit!" they all said. "What a pattern! What colors! Such luxurious clothes!"

"The canopy to be carried above your majesty awaits outside," said the grandmaster of ceremonies.

"Yes, I am ready!" said the emperor. "Don't they fit well?" He turned once again toward the mirror, because it had to appear as though he were admiring himself in all his glory.

The chamberlains who were to carry the train held their hands just above the floor as if they were picking up the train. As they walked they pretended to hold the train high, for they could not let anyone notice that they could see nothing.

The emperor walked beneath the beautiful canopy in the procession, and all the people in the street and in their windows said, "Goodness, the emperor's new clothes are incomparable! What a beautiful train on his jacket. What a perfect fit!" No one wanted it to be noticed that he could see nothing, for then it would be said that he was unfit for his position or that he was stupid. None of the emperor's clothes had ever before received such praise.

"But he doesn't have anything on!" said a small child.

"Good Lord, let us hear the voice of an innocent child!" said the father, and whispered to another what the child had said.

"A small child said that he doesn't have anything on!"

Finally everyone was saying, "He doesn't have anything on!"

The emperor shuddered, for he knew that they were right, but he thought, "The procession must go on!" He carried himself even more proudly, and the chamberlains walked along behind carrying the train that wasn't there.

[Christians4LessGvt]

Don't Fear A Housing Dip

John Tamny, 08.23.10

There's a growing consensus that another economic contraction is likely if home prices in the U.S. dip. The thinking here seems to be that if prices decline, the resulting increase in foreclosures would weaken already shaky banks that would either fall into insolvency, tighten lending standards or both. With bank lending already down, renewed weakness would supposedly strangle a nascent economic recovery.

Scary stuff for sure, but also arguably overdone. Most would agree that heavy investment in the housing sector helped get us into the mess we?re in, so for housing worriers to suggest that an artificially enhanced property market is our cure is to get things backward.

More realistically, the mortgage defaults and resulting housing weakness a few years back signaled an economy on the mend thanks to markets correcting overinvestment in that space. If economic growth is the goal, the best thing we could do would be to let houses and mortgage securities find their natural, market clearing level.

To do otherwise, as in if Washington continues to use limited capital to prop up housing, would be for our federal minders to elongate what remains a painful economic downturn. A housing correction, far from limiting growth, would actually constitute economic revival for underutilized capital migrating toward more productive pursuits.

When an individual buys a home, there's merely a transfer of wealth from one person to another. This is quite unlike the purchase of shares in a public company, or the deposit of funds in a bank where an individual is transferring capital to existing and future businesses eager to expand. To invest in housing is to essentially transfer capital into the ground, whereas when we save and invest we provide entrepreneurs with the means to expand.

This is important in light of the housing boom of not long ago. It's once again assumed that a decline in prices from what remain high levels would be economically harmful, but it could more credibly be stated that the not-so-long-ago rally in home prices was the recession for limited capital flowing into unproductive assets of the earth over productive assets of the mind.

To make what transpired not long ago clearer, tomorrow's Googles, Microsofts and Intels suffered a capital deficit amid the rush to housing, and builders gorged on the capital that passed them by. This was no accident; rather it was the predictable result of policy from the U.S. Treasury in favor of a weaker dollar.

History shows that during periods of currency weakness, available capital flows into tangible assets least vulnerable to the aforementioned debasement. Ludwig von Mises referred to this phenomenon as a "flight to the real," and it's what has always occurred when monetary authorities seek a decline the value of the unit of account.

Looking at the decade just passed, the dollar?s impressive weakness drove up the nominal value of all commodity-like assets, with housing a natural beneficiary. Not only did this "money illusion" distort home purchases, but it ultimately created a housing glut as faulty price signals tricked developers and lenders into believing that home prices could only rise. Evidence of the overbuilding that resulted from monetary mischief is everywhere at present, with unsold and uninhabited homes dotting suburban landscapes across the country.

For the federal government to then use capital borrowed or taxed from the private sector to put a floor under home prices now would be for it to continue to distort real market signals on the way to more investment in housing. We?d be doubling down on an economic bet that previously helped put our financial system on its back.

The logical response is that intervention in the property space is necessary to maintain the fragile health of a banking system that would suffer mightily from another round of mortgage defaults. Fair enough, but this thinking ignores what little good the savior of Japan's zombie banks did for its economy during its two lost decades, plus it grossly overstates the importance of traditional banks when it comes to the accession of credit.

Indeed, going back to the early part of the 20th century, credit and its sources had already evolved away from the banking system. From 1900 to 1910 alone, 70% of funds for manufacturing were generated within non-bank corporations. Banks themselves were being made increasingly irrelevant by market forces.

More modernly, a Minneapolis Fed study from 2008 revealed that by 2008, 80% of all business borrowing took place away from what we consider banks. So while bank failures conjure in our minds a total freeze-up in terms of credit, the greater truth is that loans and capital are fungible, and most credit is already generated away from the money and banking sectors.

No doubt a resumption of bank failures would hurt for a time, but markets are nothing if not resilient, and the decline of some financial institutions would merely create a growth opportunity for credit generators outside the system. The economic term for this is the "substitution effect," and it's something we should try.

At this point it's essential to let the prices of houses and their underlying mortgages reach their natural level in order to cleanse the economy of the economic practices that did us such harm not long ago. If this leads to a correction, far from an economic retardant, such an occurrence would unlock the capital needed to fund real wealth production, and the sooner we allow this, the sooner the economy can begin growing again.

http://www.forbes.com/2010/08/20/economy-finance-housing-dip-opinions-columnists-john-tamny.html?boxes=Homepagechannels

[Kramer]

That can easily be solved with yet another STIMULUS. That's why Obama, the brain, got elected, right.

I think it's time to get David Limbough's new book.

http://www.amazon.com/Crimes-Against-Liberty-Indictment-President/dp/1596986247