Obama’s Executive Order: Refinance Mortgages
Campaign Talk with No Substance – The Obama Rhetoric and more Foreclosures
Great the Financial Genius Obama is on the campaign trail spewing his useless rhetoric. Seems like he was too busy destroying the country to take notice of the Housing Sector until its campaign time. If you think I don’t like Obama… well you would be right, but don’t like is a relatively weak term… I hate the douche! He’s lying manipulative scum. If that offends you then this article is certainly not for you. If it doesn’t offend you then maybe you are a person that understands the massive DAMAGE the Obama Administration Policy has done to our country. And I don’t need to hear any whining about how ineffective Congress is. During the Obama Administration the Senate and his own inept self have had control.
Let’s get to the reasons Why the Refinance Mortgage Executive Order will FAIL
First off – the program only applies to loans backed by Fannie Mae and Freddie Mac (The Federal Government). That leaves out according to CBS News about 7 Million of the 8 Million Homeowners who are underwater on their mortgages.
But what does it mean to be underwater? It means the value of the property is less than the outstanding balance of the loan. In Nevada it’s not uncommon for a crappy 2 bedroom house to have sold for $300,000 in 2004 to now be “worth” $125,000. That’s $175,000 “underwater”. And this is not the exception in Nevada it’s the rule. Homeowners this far underwater are every where. The bigger question is Why did these people agree to pay such high prices?
If they couldn’t afford the loan in the first place why will they suddenly be able to afford the loan after a refinance? Are you going to keep throwing good money at a bad investment? Answer: Only if you are an idiot. So only idiots will try and refinance, because it doesn’t make sense. When people STOP looking at homes as investments and START looking at homes as monthly expenses for housing then the market will stabilize.
It makes no sense to have a high value on a home that you do not plan to sell! That only raises your property tax. So when the Federal Government talks about housing recovery they talk about artificially inflating the price of housing AGAIN! Who does this benefit? Well it benefits BANKS and well BANKS, and then there are the BANKS that benefit. The profit all goes to the bank.
On a simple 30 flat rate mortgage at 6% Interest on a $100,000 home the cost to finance the home over that period of time is $253,000 including an assumed Property Tax rate of $1.25%. The actual interest paid on the property is MORE than the Principal. Who gets all that money? That’s right your friend the Criminal Banking Cartel!
So tell me again why it’s so essential that housing prices go skyrocketing back up to ridiculous unsustainable prices? Oh right, so the banks can get more money out of you and so the Government can get more taxes out of you!
Secondly – Refinancing is NOT free. If a person is in such financial straights that they can not pay their mortgage where are they going to come up with the MONEY UP FRONT to cover the cost of refinancing?
Here are costs you may be required to pay:
* Loan Discount Points.
* Loan Origination. Expect to pay 1 - 1.5 percent of the loan principal.
* Application. $75-$300
* Inspection. $175-$300
* Document Preparation.
* Appraisal. $150-$400
* Credit Report.
* Title Policy. $250 up to $900
* Escrow Fee.
* Beneficiary Demand.
* Loan Tie-in.
* Delivery and Courier.
* E-Mail Doc.
* Tax Service.
* Attorney/closing fee $750
Okay I got tired of looking these all up. The point is it can cost several thousand dollars to refinance and if a person can not afford the payments how will they afford the refinance? Borrow more money? And just because the president tells the Banks holding Government paper to refinance doesn’t mean they will offer you enough of a rate discount to offset the cost of the refinance itself.
Yes there will be some people that will benefit in some instances, and those people will surly appreciate the “windfall” as a result of executive order. But this is much more like the Cash for Clunkers program which essentially did nothing for the economy at large.
Obama is a clueless useless douche and the sooner he is gone the better.
Ron Paul is the ONLY candidate that understands the ROOT CAUSE of the economic problems are the banks themselves NOT the people.
If you are an idiot keep supporting Obama, and after 4 more years there will be no hope of change ever. If you want to see the country return to prosperity then vote for Paul. The choice really is that simple.