“The problem with socialism is that you eventually run out of other people's money.” ― Margaret ThatcherSometimes the government will do something and many citizens will think, “Wow. How nice!”
Perfect example: President Obama’s plan to refinance mortgages for 2 to 3 million borrowers.
According to the Department of Housing and Urban Development (HUD), any American with a mortgage insured by the Federal Housing Administration (FHA) endorsed on or before May 31, 2009, and who is current with their mortgage payments would qualify. This is enforcing a Federal Housing Finance Administration (FHFA) policy from Feb., allowing refi’s up to 125 percent loan-to-value.
Furthermore, during a press conference on this topic, President Obama stated:
“Today we’re taking it a step further — we are cutting by more than half the refinancing fees that families pay for loans ensured by the Federal Housing Administration. That’s going to save the typical family in that situation an extra $1,000 a year, on top of the savings that they’d also receive from refinancing. That would make refinancing even more attractive to more families. It’s like another tax cut that will put more money in people’s pockets. We’re going to do this on our own. We don’t need congressional authorization to do it.”
This is the part where you say, “Wow. How nice!” (Never mind he is superseding congressional authority that only allowed refi’s for up to 90 percent loan-to-value and never mind that qualifiers will have to pay the other half of the refinancing fees up front.)
Now here’s the real catch: The borrowers who qualify for the refinanced mortgage do not have to go through the typical underwriting process — meaning no credit check, no employment verification and no verification of income, reports CNS News.
And the cherry on top: because FHA will surely take a hit on covering these refinanced loans, guess who gets to pay the government back after it adds this bill to the federal debt?
Get full story here.