Friday, March 26, 2010

Obama’s foreclosure plan: Peggy The Moocher’s dream comes true

You remember Peggy the Moocher, she is the sister who voted for Obama because she thought he was going to pay her mortgage.

Well Peggy will be sitting pretty very soon. 
From The Washington Post: The Obama administration plans to overhaul how it is tackling the foreclosure crisis, in part by requiring lenders to temporarily slash or eliminate monthly mortgage payments for many borrowers who are unemployed, senior officials said Thursday.
Banks and other lenders would have to reduce the payments to no more than 31 percent of a borrower's income, which would typically be the amount of unemployment insurance, for three to six months. In some cases, administration officials said, a lender could allow a borrower to skip payments altogether.
[…] Officials said the new initiatives will take effect over the next six months and be funded out of $50 billion previously allocated for foreclosure relief in the emergency bailout program for the financial system. No new taxpayer funds will be needed, the officials said. 
I have a better idea, take the $50 billion and pay down the deficit with it. Then institute my time tested plan called “The Moving To More Affordable Housing Program”.  The details of the program are pretty straightforward; you pack up all your crap and move to a smaller more affordable place. It even comes with a secondary option; I call it “The Family and Friends Option”. Family and friends who love and care about you, makes their homes available to you for free on a short-term basis.

The best part about The Moving To More Affordable Housing Program is that it’s FREE! Even Peggy can try it, though I kind of think she will opt for the Family and Friends Option.


spc said...

I didn't expect a laugh reading this- This is the first I've heard of this, but I haven't been watching the news much this week. I want a house as bad as anyone who doesn't have one, if only I had known I could get one for cheap. Unfortunately, the system is being redesigned to prevent failure at the expense of the successful. I know people that have looked for government aid programs (although not directly related, it provides insight as to why tyese programs never fix anything) and it seems that aid is only provided to real deadbeats. People usually only qualify if income is so low that they would not be able to get aid and work at the same time. So unemployment is incentivized. Not sure these programs would work the same way, but since the money is apparently free, I'm sure we could all get our houses paid for (throw in a new GM while your at it) as I should be paid "according to my need".

Clifton B said...


...So unemployment is incentivized.

Exactly. Have you notice how many times they keep extending unemployment benefits? It is like they want a permanent welfare class.

As you know, I am from NJ, here we have brutal property taxes. I cannot tell you what a struggle it is becoming to pay them. It really gets me angry knowing that I could lose my home because I can no longer afford to pay for someone else's free ride. Enough with the hand outs.

Beth West said...

Concerning the family and friends plan, what kind of guest would many of these folks make?

I have friends who have let several families move in with them because they were in a bit of a crisis, and it did NOT work out well. They tended to not pay any portion of the expenses, gobble up all the food, as well as generally making a mess and refusing to help clean up. Before you let someone move in with you, I suggest that you know them quite well and be willing to have your relationship destroyed.

Just a conservative girl said...

Thanks for making me laugh out loud. More affordable housing program - classic.

This is going to continue to drive down the housing market. We have been discussing selling and renting from now on. We need to wait to find out if the mortgage deduction is really going to be taken away as is in Obama's budget plan.

Ultimately, this is going to hurt lower income people, as they won't be able to get a mortgage anymore even if they have the down payment and the credit rating. That is a shame.

Clifton B said...

Beth West:

You know Peggy probably would not last a week under the Family and Friends plan.

I hear you about the freeloader thing. It happened to me. Let a friend stay with me because she was in a jam, after a month the sister got her walking papers. I suffer moochers poorly.

Clifton B said...


I see something else. Do you see how unemployment benefits just keep getting extended over and over again. The same thing is going to happen with this, watch.

It is buying votes. Vote for Obama and he will pay your mortgage.

Hot Sam said...

Let's not be heartless here.

I propose that we spend some taxpayer money to actually drive government-hired moving vans up to their houses and relocate them into nice, affordable apartments or investor-owned houses for rent. Anything which speed up their departure is worthwhile because right now they're getting free rent.

Then those same moving vans can move in responsible renters with good incomes who didn't drink the Affordable Housing Flavor Aid.

Instead of having the banks write down principal for the deadbeats, they can offer the houses at short-sale prices to said responsible people BEFORE speculators can get their grimy hands on the properties.

These smart, thrifty people will have several months of mortgage payments paid for by the government and low interest, low down payment loans.

Obama's plan merely rewards idiots for their vices and punishes the rest of us for our virtues.

I could have bought a house in California in 2004, but I was wise enough to run, not walk away from that market.

Early next month, I am moving into the first house of my 44 years of life. I have been patient and prudent, waiting for my chance to own.

The $8000 Homebuyer's Tax Credit I will get is NOTHING compared to the year or two of free rent many of these deadbeats have received. It is NOTHING compared to the massive writedowns of principle and interest they're getting. The HAFA program is offering interest rates as low as TWO PERCENT for modification. I couldn't get anywhere near that low a rate with my Jumbo VA loan.

We need to end the Housing Industrial Complex which has done nothing but distort the buy vs. rent decision and create one housing bubble and financial crisis after the next.

Same stuff, different decade.

Unknown said...

Some of the companies have recognized the business openings in giving short-term apartment solutions as an alternative to hotel supplements for the corporate moving and guests.

new york short term rentals

Clifton B said...

Nick Rowe:

Well said. I have another fear about this plan. I am afraid that they will try to stretch it out like they are doing unemployment benefits. These jokers will be living mortgage free for a lot longer than 3 months.

Clifton B said...


Good example. These foreclosures can be handled by the free market. Government need not get involved. All government has to do, it stop hampering the productive side of the economy, we will do the rest.

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