MoronInCharge’s posting of The Dumbest Short-Term Fix Ever  hit the nail on the head.  But Hilliary’s calculated pander is hardly a flash in the pan alongside of the rich vein of fool’s gold being mined feverishly by DC World. 

  

The mortgage credit bailout will be the mother load for these prospectors insulated from reality in their DC caves inside the Green Zone Belt – and it will have LOOOONG-term effects.  You might say it will fix us good over the long-term. 

  

One proposal that will probably get flushed out with the tailings is to have the lenders mark the rubes’ loan principles down to market if they are upside down on their mortgage.  The lenders have been volunteered to get under this cave-in and shore up the mineshaft.  I guess that lends new meaning to the term "shafted".   

     

From the Washington Post:

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“The Office of Thrift Supervision is preparing a plan to help mortgage borrowers who owe more than their homes are worth and to discourage them from abandoning those properties, agency officials said yesterday.    

  

“Under the regulatory agency's proposal, still in its early stages, these borrowers would refinance into government-insured loans that cover the current value of their homes. The refinancing would pay part of what's owed to the original lender. For the remainder, the lender would get what the plan's backers call a "negative equity certificate." The lender could redeem the certificate if the home is eventually sold at a higher price.”

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Mortgage Plan Seeks To Stem Foreclosures, By Dina ElBoghdady, Washington Post   

  

  

And from From The Economist:

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“One approach under consideration in Congress is to adjust America's personal-bankruptcy law so that judges can “cram down” a mortgage to the market value of a house.…”

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“Unsurprisingly, bankers are lobbying for a different approach, one where the government stems the foreclosure spiral (and limits losses) by buying and refinancing whole swathes of mortgages. One idea, championed by Chris Dodd, the chairman of the Senate Banking Committee, is to recreate a modern version of the Home Owners' Loan Corporation, a Depression-era institution that refinanced mortgages in the mid-1930s when almost half of all home loans were in default. Other proposals have similar aims.”

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Foreclosures in America

Searching for Plan B

Feb 28th 2008 | WASHINGTON, DC
From The Economist print edition

 

 

And here’s an interesting term, new to me, that is explained in the foregoing article: jingle-mail.  And a prediction:  “forthcoming jingle-mail tsunami”.

  

You don’t have to be a financial giant to realize that once the dust has settled the Average American will go to Hell for a loan of any kind.  This kind of short-term fix is a game changer, and will result in a long-term addiction to the government stepping in and modifying contracts of all kinds.  

  

This has very little chance of passing, but there are many more political miners lined up at the entrance to the mine with their own particular pick axe to grind (sorry about that stretch).  I haven’t seen real gold yet, and I haven’t seen a proposal that shouldn’t be flushed out to the tailings pond without delay.   

  

As I told anyone that would listen a couple of years ago, those of us that played by the textbook and kept our finances in good order will be called upon to bail these people out, whether that is the speculator, greedy ignorant buyer, loan originator, bank or whatever. 

   

To coin a phrase (with my apology to MoronInCharge), this is The Dumbest Long-Term Fix Ever.    

  

And at the risk of repeating myself, no matter what the mining engineers on Planet DC come up with, the Average American is going to pay for this through taxes, interest rates, lower property values, etc.   

  

   

Additional References:

LA Times    

Congressman says his mail ran '50 to 1' against mortgage rescue

  

  

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Oh, I did mention that it is time for regime change?     

  

Impeach the Bush /Cheney Regime to restore confidence!