Obama On Jobs and Mortgages

Obama On Jobs and Mortgages

Okay, so once again, I was reading.  I do so love to read, just not really for business, but it's a necessary evil.  I came across this article in REUTERS talking about how Obama wants to talk with congress on MORTGAGES on September 7th. (Since I read the article Ihave learned that jobs will be included and that the talk has been postponed perhaps until the end of September.)  I wish a good joke would come to mind right now.  I can picture it now, his way of fixing taking over the way mortgages are handled.


But seriously folks, the article is really good.  Part of BHO's plan is to target mortgages that may be underwater.  If the people are current on their payments, it is said that they will be allowed to modify their mortgages to the new lower rates.  The problem with this is that the banks have been telling everyone that if they want to modify they have to be behind on the payments.  Seriously, this just happened to a good friend of mine.  And they are still not sure if mortgages that are less than 80/20 LTV will be included or not.  Obviously the plans have not yet been firmed up!


"White House officials had long been wary of trying aggressive new programs to revive the housing market. The prevailing view at the White House over much of the last two years was that any remedies would cause at least as many problems as they solved."


I loved the part in the article where it asks, THE CHICKEN OR THE EGG".  The just of this question and explaination is do we work on housing now or create jobs first.  Seems to me that if people were employed, they'd be better equipped to pay those modified mortgage payments.  And BHO has been reluctant to do anything whatsoever about jobs thus far.  Christina Romer, a former top BHO exec says that the people would be much better served by job creation programs than messing fixing the mortgage programs.


 "A bold jobs program might be just as effective and better targeted to those who need help the most. Also, healing the economy is as likely to heal the housing market as programs aimed directly at housing," said Romer, a professor at the University of California, Berkeley.


Of course, it had to be a Senator, and I use the term loosely, from our wonderful state of California who co-authored this brilliant new piece of legislation.  Really, Ms. Boxer, can't you get at least this right?  


The bondholders/shareholders are crying foul.  They would be on the losing end of this proposition.  Quite a few number of fund managers have invested heavily into Fannie, Freddie, and bonds.  They are having such a hard time in that market, too.  


So we shall wait and see how this all pans out.  I mean after all, isn't that what we have become, a passive people?