BrianGarst.com

Obama Pledges $275 Billion to Cut Mortgage Payments

U.S. President Barack Obama pledged $275 billion to a program that includes cutting mortgage payments for as many as 9 million struggling homeowners and expanding the role of Fannie Mae and Freddie Mac in curbing foreclosures.

The plan includes $75 billion to reduce monthly payments for borrowers, helps homeowners with loans owned or backed by Fannie Mae and Freddie Mac to refinance at lower rates and promises incentives to industry. Obama will double to $200 billion funding available for Fannie and Freddie to buy loans.

Let’s break down the genius of this plan:

Reward speculators who thought house prices would never drop? – Check

Reward banks that made bad loans? – Check

Reward irresponsible borrowers who falsified loan applications and lied about assets, or just otherwise recklessly took on obligations they could not afford? – Check

Further intensify the problems of moral hazard and undermine the foundations of a responsible capitalist society? – Check

Leave to the next generation yet another bill to pay for the baby-boomer’s irresponsibility? – Check

Blame everyone and everything except for the government policies and failures actually responsible? – Check check check check check

Barack Obama Fannie Mae financial crisis Freddie Mac