Wall Street Ends Hope for Homeowners Via Congress

THE LIAR IN CHIEF FAILS ONCE AGAIN TO SAVE HOMEOWNERS!

IN APRIL OBAMA ANNOUNCED BIG PLANS. SIX WEEKS LATER THOSE “BIG PLANS” EVAPORATE!

Obama pitches refinance plan for homeowners

By The Washington Post and The New York Times -  Published April 10, 2009

President Obama meets with Treasury Secretary Timothy Geithner and homeowners on Thursday during a housing-refinance round table at the White House.

WASHINGTON — President Obama on Thursday touted his administration’s efforts to lower mortgage rates in a round-table discussion with Washington, D.C.-area homeowners who have benefited from refinancing into more affordable loans.

Their stories were intended to serve as testimonials for the masses who have not called a mortgage broker, whether they are in danger of foreclosure or simply looking for extra money.

Applications for refis have increased 88 percent since February, according to the Mortgage Bankers Association. And Fannie Mae, a mortgage-financing company, has said its refinancing volume jumped to $77 billion in March, twice the level of the previous month.

“The main message we want to send today is that the programs that have been put in place can help responsible folks who have been making their payments, who are not looking for a handout, but this allows them to make some changes that will leave money in their pockets and leave them more secure in their homes,” Obama said.

Obama said new housing programs would be presented soon, following last month’s plan to provide $275 billion to help distressed homeowners, of which $75 billion would subsidize the mortgage industry to help borrowers avoid foreclosure. But he offered no details Thursday.

The refinancing boom has been fueled by lower mortgage rates. The average rate on 30-year fixed notes was 4.87 percent Thursday, slightly higher than the 4.78 percent last week. Still, it was the lowest level since 1971, which the president used to bolster his two-pronged argument for why refinancing is so important.

First, families will have more money to spend, which will boost the economy. If that happens, home values likely will rise, which will begin rehabilitating the beleaguered housing market that contributed significantly to the economic collapse.

Despite the uptick in refis, the administration’s housing program has yet to have a significant impact, and homeowners with jumbo mortgages still struggle to take advantage of lower rates.

Obama’s focus was intended simply to draw attention to a government Web site that tells people if they are eligible to refinance their mortgages.

“We hope that everybody takes advantage of it. The Web site is makinghomeaffordable.gov — is that right?” Obama said, repeating the address five times in five minutes. “So get on the Web site, find out what’s available.”

Refi with little equity
The federal program Obama launched last month allows borrowers with little or no equity in their home to refinance. Under that program, borrowers are eligible if they owe no more than 5 percent more than the home is worth and have a mortgage backed by Fannie Mae or Freddie Mac.

Lenders began delivering refinanced loans under that program to Freddie Mac on April 1, and 20 lenders had submitted applications within 48 hours. Fannie Mae received “several thousand” applications Monday when its computer systems were updated for the program.

But not all banks have implemented the program. Bank of America and Wells Fargo began offering the refinance program this week to many homeowners. But both are excluding homeowners with mortgage insurance.

Citigroup said it would begin taking refinancing applications for loans owned or guaranteed by Fannie Mae on Saturday but has not set a date for beginning to take applications for Freddie Mac loans. SunTrust began offering the refinanced mortgages to Fannie Mae-backed mortgage holders Monday but will not expand it to include loans back by Freddie Mac until May.

And it is taking even longer for some lenders to launch the foreclosure-prevention part of Obama’s housing program.

Under that program, the government will pay lenders to reduce payments of troubled homeowners to affordable levels. That effort also was launched last month. But Bank of America, one of the country’s largest lenders, for example, will begin offering those modifications “in the next two weeks,” according to a company statement.
Seattle Times

AND THE TRUTH IS:

OBAMA ABANDONS THE PEOPLE AND BENDS TO WALL ST INTERESTS. MORTGAGE INTEREST RATES SKYROCKET:

As if the bank bailouts weren’t proof enough that Wall Street owned Congress. History will likely show that these bailouts involved the largest transfer of wealth ever — from the working class to that small group of billionaires who own the corporations.

This fact is recognized by most people now and is such common knowledge that even the mainstream media feels comfortable discussing it…matter-of-factly.

These corporations have also exerted tremendous influence in other realms of politics, working towards destroying Obama’s campgain promises of health care, job creation, civil liberties, the Employee Free Choice Act, peace, etc.

In each case, the promised reform was gutted of its essence, and “compromise” versions of the bills are now being discussed: instead of universal health care, we will likely be universally mandated to purchase health insurance; instead of “job creation” we are told that the stimulus has “saved jobs” (contrary to the evidence); while troops are “drawing down” from Iraq, the war in Afghanistan/Pakistan is being escalated; instead of allowing workers to organize unions easier, a compromise version – Employee Free Choice Act, minus card check — seems more politically “pragmatic,” etc.

Even Obama’s smaller reforms face similar partial abortions in Congress. For example, Obama recently signed into legislation the Helping Families Save Their Homes Act. But, as The New York Times pointed out, the bill “was missing its centerpiece: a change in bankruptcy law he [Obama] once championed that would have given judges the power to lower the amount owed on a home loan.” ( Ailing, Banks Still Field Strong Lobby at Capitol, June 6, 2009)

Obama was not demanding that foreclosures cease, or that those who’ve recently lost their homes — because of the economic crisis — be allowed to return to them; he was merely advocating that those who can still afford mortgage payments be allowed to lower their balances.

Even this small crumb for homeowners was rejected by Wall Street, whose profits would have suffered.

The New York Times explains: “… the [bills] real threat was to their [the banks] profits. The proposal would have shifted negotiating power to the millions of troubled homeowners who could use the threat of bankruptcy to wrest lower monthly payments from lenders.”

This truth prompted an oddly blunt reply from Democratic Senator Sheldon Whitehouse:

“This is one of the most extreme examples I have seen of a special interest wielding its power for the special interest of a few against the general benefit of millions of homeowners and thousands of communities now being devastated by foreclosure.”

The New York Times article also quieted those apologists for Obama who claim that he is an honest leader held back by an unreasonably conservative Democratic Congress:

“Throughout it all, the banks took advantage of the Obama administration’s seeming ambivalence. Despite its occasional populist rhetoric, the White House was conspicuously absent from weeks of pivotal negotiations this spring.”

And:

“While Mr. Obama reaffirmed his support for the proposal shortly after becoming president, administration officials barely participated in the negotiations, a factor that [corporate] lobbyists said significantly strengthened their hand.”

It must be noted that the corporation’s next big demand on the government will be to eliminate the tremendous U.S. debt, which they rightly view as a destabilizing factor for making profits. The problem lies in how they will propose to correct the problem: through the gutting of the U.S. social safety nets such as Social Security, Medicare, Medicaid, and other programs that benefit working families and the poor.

This government debt is the direct result of trillion dollar bank bailouts and wars of aggression that benefit only the rich. The working class, however, is being enlisted to pay for these polices.

The New York Times article ends with an important lesson:

“There was no counterweight to that [the banks] legislative muscle. Bankrupt homeowners do not have a political action committee or lobbyists.”

And while labor unions do have lobbyists, they cannot compete with the purchasing power of the banks. The fact that these two groups are both members of the same political party — vying for the ear of the same politicians — is utter lunacy. This tactic has yielded absolutely zero results for workers: every progressive promise of Obama’s has been butchered beyond recognition, or outright ignored.

This is because the Democratic Party is a party of big business, now more than ever. This fact is especially important in these times of economic crisis, where corporations are — because of shrinking profits — becoming louder in their condemnation of unions, while being emboldened by Obama’s horrendous anti-labor handling of the General Motors and Chrysler bankruptcies.

The political power of the corporations is dramatically exposing the rotten nature of America’s political and economic system — represented by the Republicans and Democrats — where the tremendous wealth of a small group allows them unprecedented power at the expense of millions of others. Without an independent political voice, the working class will continue to be “betrayed” by Democratic politicians whose pie in the sky campaign promises fail to yield even crumbs.

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