They are so stupid in Washington DC that it baffles the mind

Posted by Mike Sylvester - 7/2/09 @ 6:37 pm - Filed Under National Politics

I think everyone reading this blog would agree that most of the drop in real estate prices has been due to the fact that our lending institutions (with government encouragement) lent Americans more money than they should have.

I hope that everyone reading this blog also remembers that the taxpayers now own Freddie Mac and Fannie Mae and that we are responsible for the debts of those two failing mortgage institutions.  In my opinion it will take billions upon billions of dollars to prop up these failing companies…

Up until yesterday these two mortgage giants could only refinance loans through President Obama’s “housing fix” program when the loan-to value-ratio was 105%.  What this meant in simple terms was that through these two government lenders you could refinance a maximum of $105,000 on a house that was worth $100,000.  In my opinion 105% is far too high; I would be more comfortable with 80%.

The idiots in Washington DC decided to increase the maximum ratio to 125%.  This means if your house is worth $100,000 you can refinance $125,000 on that house through Fannie and Freddie through this program.

Please read this article about it.

I especially like this quote “By expanding refinance eligibility, we can bring relief to more struggling homeowners more quickly,”Treasury Secretary Timothy Geithner said in a statement.”

Where does President Obama find these idiots?

The real estate market crashed because the banks loaned too much money to Americans.  This easy money drove up home prices.  When the real estate market crashed this then caused many Americans to default on their home mortgages; which in turn caused many financial instruments (Those consisting of these bad mortgage loans) to plummet in price.  This in turn caused many financial institutions to fail.  This in turn caused the Federal Government to pour billions of dollars of tax payer money into these financial institutions.

The idiocy must stop.

I am scared for the future of this country…

Mike Sylvester

Comments

2 Responses to “They are so stupid in Washington DC that it baffles the mind”

  1. tim zank on July 2nd, 2009 7:24 pm

    I pointed out about a year ago that we’re just gonna do it all over again. FHA zero down loans were discontinued, so guess what we have now? USDA zero down loans. Same program, different name. Bad credit, low scores, 100% financed, same old sh%t.

    If Barney Frank get’s his way, we’ll be guaranteeing 150% LTV on frickin condos too to anybody who has a pulse…..

  2. Bob G. on July 3rd, 2009 3:53 pm

    Mike:
    This debacle in D.C. is nothing short of that “Special kind of stupid” we’ve heard tell about…
    And it’s bordering on INSANITY.

    Maybe this administration ought to be checking the futures market prices for STRAIGHT JACKETS…and a nice quiet place to wear them.

    Just a thought.

    B.G.

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