The Super Tuesday edition of the Morning Jolt features a look at the suddenly miserly Obama campaign, whom I’ll be voting for in the Virginia primary, and then this White House effort to help out all of those struggling to make payments on their second, third, and fourth homes.
Flip This White House!
President “Fair Share” is finally reaching out to help all of those Americans struggling with their second home payments: “The Obama administration will extend mortgage assistance for the first time to investors who bought multiple homes before the market imploded, helping some speculators who drove up prices and inflated the housing bubble. Landlords can qualify for up to four federally-subsidized loan workouts starting around May, as long as they rent out each house or have plans to fill them, under the revamped Home Affordable Modification Program, also known as HAMP, according to Timothy Massad, the Treasury’s assistant secretary for financial stability. The program pays banks to reduce monthly payments by cutting interest rates, stretching terms, and forgiving principal.”
Help for home-flippers! The Washington Post notes with dry understatement, “the change is likely to raise the hackles of those who believe that taxpayer money would be better spent on underwater homeowners who bought homes with the intention of living in them, not to game the market.”
Calculated Risk notices that the example cited in the article doesn’t make financial sense, depicting a man wealthy enough to purchase four rental properties who somehow cannot bring in enough rental payments to cover the costs of operating the properties. “I wonder how far rents have fallen in ‘over 10 years’, and if Russell took out money during the housing boom. This doesn’t appear to add up . . .”
The Lonely Conservative observes, “On January 24, 2012 President Obama stated in his State of the Union speech ‘Millions of Americans who work hard and play by the rules every day deserve a government and a financial system that do the same. It’s time to apply the same rules from top to bottom. No bailouts, no handouts, and no copouts.’ He obviously didn’t mean it, seeing that he’s bailing out out real estate speculators who helped inflate the real estate bubble that’s left so many Americans with underwater mortgages.”
I understand the original name for the program was Second Chance Assistance for Multiple home-owners, known by the acronym, ‘SCAM.’