In the immortal words of Dan Akroyd, 'Obama, you ignorant slut'. Clearly Obama is bright guy, well he can read the heck out of the teleprompter. But I struggle to find the reasoning behind announcing a mortgage refinance plan that has little to no possibility of being voted on and passed prior to the election?
Is it just so the average Joe thinks he 'cares'? It seems to me that throwing out unsupported programs to the general public during a speech has the appearance of catering to the mob mentality. Mind you the last plan with unlimited LTV has yet to kick off. Why, shockingly, the banks are scared s&^$less. They don't know what's coming next, and oh yeah, banks are going to pay for this new new program too! You thought $5 ATM was steep. According to Jamie Dimon the average bank account costs $300 a year for the bank - slap another tax on those banks and dang it you've got trickle down economics, where the increased tax and banks translate to increased borrowing and banking fees. Do you think the banks will take the hit?
It's 2012, the crisis really began in 2006/2007 and hit hard publicly in 2008. Isn't it a little late to go after the people who were responsible for the crisis? And those people are....well all of us. From the first time home buyer who HAD to have the bigger house; they couldn't stomach a condo! they deserve an SFR. To the mortgage broker who rather than just originate conforming loans (those loans were always available) decides to produce subprime loans, hearing there would be big returns, to the mortgage lender who set guidelines, pricing and loan terms along with the investment bankers who packaged them and sold them to funds who bought these hot potatoes on the hopes of high yield returns for their investors, or the rating agencies who rates this crap AAA. Well they all weren't rated that high, but clearly there appear to be conflicts looking back.
How a stated income loan for a fixed income elderly borrower with less than perfect credit was allowed to purchase with no money down with a loan that had a fixed rate for only 2 years and huge prepayment penalties along with a monster adjustment schedule and life cap is beyond me. Did I originate those, probably. I am no innocent victim here; nor am I am accomplice in a crime. The fact is we all drank the cool aid and believed the ride would go forever..reminds me of a time like the "Roaring Twenties", which was followed by a little period of time called the great depression.
My point, I hope is clear, we were all to blame, and it will happen again, maybe not in mortgage (but probably) but maybe tech again, energy, fertilizer, semi conductors, etc. There will always be bubbles. I guess the only thing you can hope for is you cash-out at the right time. Those are the people who deserve the credit and maybe even some of the blame.
You know come to think about it, its 2012, which mean the 20's are coming, by that time maybe we will experience some roaring growth again. Time will tell, but one thing is for sure, history repeats itself.
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