Reality Check On Obama’s Foreclosure Bailout
By: Guest Authors
by: Neil Braithwaite
The following is an excerpt from President Obamaâ€™s foreclosure â€œcrisisâ€ speech. Pay very close attention as you read.
â€œOur housing crisis was born of eroding home values, but also of the erosion of our common values. It was brought about by big banks that traded in risky mortgages in return for profits that were literally too good to be true; by lenders who knowingly took advantage of homebuyers; by homebuyers who knowingly borrowed too much from lenders; by speculators who gambled on rising prices; and by leaders in our nation’s capital who failed to act amidst a deepening crisis.
So solving this crisis will require more than resources – it will require all of us to take responsibility. Government must take responsibility for setting rules of the road that are fair and fairly enforced. Banks and lenders must be held accountable for ending the practices that got us into this crisis in the first place. Individuals must take responsibility for their own actions. And all of us must learn to live within our means again.â€
With these words fresh in your mind, let us begin our reality check.
We begin with how Obama thinks this â€œcrisisâ€ was â€œbornâ€.
â€œEroding home valuesâ€ are a result, not a cause of the foreclosure problem. Obama is clueless from the start. His ignorance and stupidity are illuminated by the fact that he is supposedly being advised by people who understand the housing and mortgage industry. He obviously either doesnâ€™t listen, doesnâ€™t get it or just plain doesnâ€™t care. Ditto for his advisors.
Obama makes the assertion that â€œthe erosion of our common valuesâ€ led to the foreclosure problem.
The fact is that 95% of homeowners are current on their mortgages. It seems pretty obvious that the erosion of values comes from about 5% of people who are having trouble paying for their homes. People with good values usually find a way to make their mortgage payments.
Now letâ€™s examine â€œwhoâ€ Obama thinks this â€œcrisisâ€ was â€œbrought aboutâ€ by.
Obama lays the blame on quite a long list of villains. Letâ€™s take a look at each one.
First, there are the evil banks that exist solely to destroy America, one loan at a time. Not to mention that they actually want to make a profit along the way. Trading mortgages for profit is what banks do. If what they did was illegal, congress would see to it that bankers all went to jail. Instead, congress gave them a 750 Billion dollar reward for all their â€œrisky â€œ business.
Now what about all those unethical lenders Obama mentioned, â€œwho knowingly took advantage of homebuyersâ€.
Sure there were some predatory lenders out there, but the majority of lenders were just following orders from Democrat, Barney Frank to give every deserving family a home regardless of their ability to pay for it.
I seem to recall seeing a lot of footage of Republicans warning Congressman Frank about an impending mortgage problem, but â€œall is wellâ€ was always Frankâ€™s reply.
Obama goes on to mention all those â€œhomebuyers who knowingly borrowed too much from lendersâ€ and couldnâ€™t pay it back.
Well, those borrowers are guilty as charged. As the closing attorney told me when I bought my home, â€œif you donâ€™t pay, you donâ€™t stayâ€. That seems to be a strictly enforced rule in the mortgage industry. But anyway, chalk one up for Obama. Even a blind mouse finds a piece of cheese sometimes.
Next, we have all those un-American â€œspeculators who gambled on rising pricesâ€ in such a hot real estate market.
It seems President Obama doesnâ€™t want anyone taking any more unnecessary risks, especially if there is any chance of making a profit. Like the kind of profit that might somehow improve your life and put money back into our economy.
So we come to Obamaâ€™s last, but certainly not least, culprit in this mortgage â€œcrisisâ€.
Obama calls them, â€œleaders in our nation’s capital who failed to actâ€.
Iâ€™m sure Obama is trying to paint with a broad brush to imply both Democrats and Republicans are to blame. Thatâ€™s just the kind of guy he is, bipartisan.
I agree with Obama that there is blame on both sides when it comes down to the facts.
The Democrats had pushed a social agenda for years that would allow â€œeveryoneâ€ to own a home. By â€œeveryoneâ€ they meant people who really couldnâ€™t qualify to buy a home.
The Democrats also pushed banks and lenders to change their mortgage qualifications, which resulted in millions of â€œriskyâ€ loans. You know, the real reason why we are in this mess today.
To their credit, President Bush and many Republicans warned Democrat, House Financial Services Committee Chairman, Barney Frank of the danger of making these kinds of loans. Those warnings from Republicans fell on deaf ears and even vehement denials from Chairman Frank and several other Democrat Committee members.
What the Republicans are to blame for is not continuing to raise the alarm. President Bush was also complicit as he refused to use his power to get the message out before things got worse.
As for solving this â€œcrisisâ€, Obama said, â€œit will require all of us to take responsibilityâ€ and â€œall of us must learn to live within our means again.â€
Excuse me, but the overwhelming majority of homeowners are being responsible by paying their mortgages and living within their means.
The problem lies not with responsible people, but with irresponsible people.
Obama’s solution to the mortgage “crisis” is to reward irresponsible homeowners, banks, lenders, speculators and yes, even government leaders by making responsible homeowners and innocent citizens of our great country pay for it all.
Hopefully, responsible America will finally stand up and say no to President Obama’s outrageous mortgage bailout scheme.