White House to bailout underwater mortgages?

You know, sometimes Paul doesn’t want to be paid, if it means robbing Peter.

Today’s hot rumor comes from James Pethokoukis: essentially, the White House (which is becoming increasingly frantic about the way that their Super Magical Unicorn Genius economic plans  aren’t working) is scheming to partially bail out people with underwater mortgages.  I know, I know: the government was not supposed to acquire Fannie/Freddie just to completely rewrite their balance sheets, but the existing scheme to let the mortgage industry gradually repair itself was apparently… a Super Magical Unicorn Genius economic plan.  This new plan won’t do a thing for F/F’s value as companies, but then this wouldn’t be an economic strategy.  It’s pretty blatantly a political one.

The mortgage Hail Mary would be a last-gasp effort to prevent this from happening and to save the Obama agenda. The political calculation is that the number of grateful Americans would be greater than those offended that they — and their children and their grandchildren — would be paying for someone else’s mortgage woes.

You know, I happen to have an underwater mortgage: we bought our house at exactly the wrong moment in time. Do you know what we’re doing about it? WE’RE MAKING OUR MORTGAGE PAYMENTS, that’s what we’re doing about it. Because we sat down and worked out how much we could afford to spend beforehand, then we stuck to that number like glue.  In other words, I don’t need a handout to pay my bills, and I really don’t need to spend another insanely large sum of money (Hot Air thinks that it could reach 100 billion, which is a large sum of money, even today) that my kids are just going to have to repay later, after the President retires to the global cocktail circuit.  And I know that people are going to argue that the majority of Americans can be short-termed bribed in this fashion, but you know something?  I don’t think it’ll work.  Particularly when it comes to people who have kids.  

At some point the Democrats are going to have to accept the fact that you cannot finesse your way out of some situations, and that this is one of those times.  Yes, it is going to be incredibly painful for long-term, still-serving federal politicians who can be linked to the crisis.  Yes, thanks to 2006 and 2008 that’s going to disproportionately hurt Democrats.  Yes, Republican and conservative operatives like myself will (deservedly) mock their pain for it.

Welcome to reality.

Moe Lane

Crossposted to RedState.

6 thoughts on “White House to bailout underwater mortgages?”

  1. “You know, I happen to have an underwater mortgage: we bought our house at exactly the wrong moment in time. Do you know what we’re doing about it? WE’RE MAKING OUR MORTGAGE PAYMENTS, that’s what we’re doing about it.”

    Democrats would say you won life’s lottery.

  2. A new mortgage bailout plan would resonate with homeowners and could stop Obama’s popularity slide. Instead of sitting and watching, the GOP should unroll its own version first, thereby deflating his balloon.

    It’s interesting to know what your opponent is going to do, but that knowledge is important only if you ACT on it.

  3. Nonono, Moe. Cloward-Pivens, remember?

    Yes, the measure will be finely tuned to apply only to Union members and “minorities”, but every mortgage broker and/or title insurance company in the country ought to be poised to apply for the bailout as soon as it appears, and so should every homeowner who’s underwater whether their payments are current or not.

    The goal should be half a trillion dollars. That should be trivial, given the number of mortgages out there. Max it out!

    Look, there’s money to be made off anything. Look at Boone Pickens. If they’re going to be tossing $100 bills out of airplanes, like the leaflets in the early propaganda campaigns of WWII, the rational response is to get yourself a really big hat.


  4. We also bought at the wrung time, and like alot of others we are paying our bills and doing without other things. We have tried to refi many times, but the back that took our loan say our house is worth less that the price that the county uses for my taxes. You can’t win so you better just keep paying the mortgage payment.

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