The New York Times Laments Lack of Bank Lending. We Should Refinance Mortgages Regardless of Credit Ratings or Ability to Repay Loans.

Abstract: The leftist mantra of free housing and continuous refinancing of mortgages is recycled at the NYT ad nauseum. No amount of logic or revealing the tacky histories of giving freebies to losers will persuade the do-gooders to relent from printing more money and giving it freely to the low class, credit unworthy folk or criminals in exchange for their votes. It seems that our government is currently “refining our understanding of borrower behavior” as they struggle with the inability to “work” with the unfortunate victims of capitalism and other low classes. Of course, there is no mention of several dozen failed social programs that failed to lift many up from poverty, but the NYT would never address such obvious failures and lay blame. Soon, our government will have to address and refine their understandings of taxpayer revolts and other behaviors. Those who played the game with good credit and industry and cautions spending will now be the targets of vicious tax mongers who will try to tax everything they have and ‘give it to the poor.’ All they have left is our wealth and they are going to get it one way or another.

The purpose of the New York Times (that is known affectionately as the Walter Duranty Papers[1] in honor of their most beloved Pulitzer Prize winner) is to defeat capitalism and infect our society with Marxism [or worse] so, a firm control of the banking system along with muzzling the media are two formidable but essential vectors in this war against ‘the rich.’ The only end result that will satisfy the Times and their lackeys in third world would be for the big countries to be dominated by socialist governments, or the UN, so that they could practice the long-awaited redistribution of wealth[2] policies that usually terminate in inflation, war and the far left absconding with what they can carry away from the wreckage. It seems that those leftist societies that the Times so  highly praise have an elite leadership cadre at the very top who are very rich by any standards thus satisfying the Trotsky fear[3] that such governments, once in power, would merely mimic the capitalists and usurp wealth and spend it on themselves. Apparently, using the usual redaction methods, we are pressed to believe that those in power in the Marxist countries live in austerity and have the best interests of the ‘poor’ constantly implanted in their policies. We can cite several cases in Eastern Europe and several dozen in Africa that defeat this premise. But, numerous demonstrated failures are no barrier to an ideologue, so they grind away at their sophomoric notions and hunt for new ways to grab wealth and ostensibly spread it around for the masses. The very fact that wealth exists is proof of their sincerity [and our guilt] and this establishes the need to control it.

So, today, the NYT ponders the problem of lending while ignoring debt, waste and corruption.

“Mortgage rates in the United States have dropped to their lowest levels since the 1940s, thanks to a trillion-dollar intervention by the federal government. Yet the banks that once handed out home loans freely are imposing such stringent requirements that many homeowners who might want to refinance are effectively locked out.”[4]-- Interest Rates Are Low, but Banks Balk at Refinancing By David Streitfeld Published: December 12, 2009 [Emphasis is mine in all quotes.]

As in most propaganda pieces the reasons for such hokum relate to the fact that banks were pressured and threatened if they did not loan money to people with little or no credit and stable jobs.  There were never any strict homeowner requirements on why or how to repay such loans as they were not allowed to be part of the refinancing contracts. They just threw printed money at the problem. This was an early attempt at redistribution of wealth disguised as ‘affordable housing’ and enforced by leftist organizing groups such as greenling.com and ACORN and others including our government.  We cannot afford affordable housing and our debt shows this. But, we are going to refinance and refinance until we get it right.

Not mentioned is the salient fact that low interest rates are mandatory and are the only way to fight debt-deflation and if they were raised the service on our National Debt would double or triple easily thus smothering our entire tax revenue  base with interest payments. Public debt is not an issue for the left as they can ‘always tax the rich.’

The  major predicament in this economy was the wild and unrestrained brutalization of credit in the pursuit of egalitarian goals that allowed people with little or  no creditworthiness to ‘buy’ homes with nothing down. This was mandated by leftist political pressure groups and the government as in the ‘affordable housing’ laws using a Neo-Marxian social remedy called the CRA [Community Reinvestment Act].[5][6] The original purpose of this socialist scheme was to redistribute the wealth without equally distributing the cost. They made that part work. This is just a wealth transfer. Thus, the low class was offered wealth in terms of this phony nostrum of ‘affordable housing’ with absolutely no responsibilities to repay its debts and only their future votes were desired as payment. The credit defaults came largely from the low class, comprised mostly of Democrats, their unconscious lackeys known as ‘independents’ and criminals such as illegal aliens. We lost 10 trillion dollars in wealth in that scheme. We are going to lose much more as Fannie Mae and Freddie Mac are insolvent and that is because these two places were dumping grounds for the debts to be lumped directly on the taxpayers; that much is crystal clear.[7] They now want to ‘refinance’ and redump the debt back into Fannie and her inbred brother. There is no limit to this. There is no limit to how much money they can print.

As predicted here, New York State is out of money:

“Declaring "the state has run out of money," Gov. David A. Paterson announced today the state will cut payments due school districts, cities, counties and insurances carriers by $750 million for the month of December to keep New York's books balanced.””[8][9]-- Gov. Paterson says state is out of money, cuts aid By James Heaney News Staff Reporter Updated: December 13, 2009, 1:34 PM  

This is a shock.

“The governor was sharply critical of the State Legislature for failing to revise the budget to close projected deficits. A deficit reduction plan approved by the Senate and Assembly came up $500 million short of closing a projected $3.2 billion deficit, he said.”-- Gov. Paterson says [Emphasis is mine in all quotes.]

Now, we get to the second part of the giveaway: more debt!

“Refinancing could save owners hundreds of dollars a month, which could be spent, saved or used to pay down debts. Extra spending would help lift the economy, and lower payments might spare some people from losing their homes to foreclosure.” -- Interest Rates Are Low

Where does this money come from?

Notice that the premise here is that people with no credit and a past history of default should have their debts ‘refinanced’ and where would that money come from? The printed money would then boost the economy? Missing here is an essay from the NYT on the test case where the previous refinancing recidivism rates hit 70%.[10] Yet another liberal social program failed. Translated in terms even a liberal ought to understand this means: those with no or very poor credit defaulted and when they were given more money and another chance they defaulted again. I wonder if there is a social message here. Yes, there is! We need to keep refinancing these loans because if they are not paid off the taxpayers will gladly pick up the bill and the good people will vote for Democrats who shoveled out free dollars using this phony plan. That is how we share the wealth! Just keep dumping debt into the refinancing cycle and help out the ‘poor.’

New York State will now default. Isn’t it too bad they cannot just print money? California [11][12][13] is close behind and New Jersey is a brisk third.

Future controls:

“The plight of homeowners has become a volatile political issue. On Friday, as the House passed a series of new financial regulations, it narrowly defeated a provision that would have allowed bankruptcy judges to modify the terms of mortgages. The measure was strongly opposed by the banking industry.” -- Interest Rates Are Low

The ‘measure’[14] was concocted by  two criminals: Chris Dodd (D-CT) and Senator Kent Conrad (D-ND) who took bribes for their support of other crooks and were enshrined in  the group known as “Friends of Angelo (FOA).” You might recall those are the special mortgages that former Countrywide CEO Angelo Mozilo”[15][16][17] created for these bribe-takers and saved our good senators a lot of money. Let us rejoice. This new ‘measure,’ crafted by the same crooks, contained 1,136 pages of who knows what. Such legislation will not be placed in the public domain for inspection because we ‘are in a hurry.’ The NYT does not mention such criminality in this article. Nobody knows how this would work out.

The culprits! Capitalist Banks!

“President Obama, in his weekly address on Saturday, placed much of the blame for the recession on “the irresponsibility of large financial institutions on Wall Street that gambled on risky loans and complex financial products, seeking short-term profits and big bonuses with little regard for long-term consequences.”” -- Interest Rates Are Low

So, some radical Marxist places blame on the banks that were forced into lending money with no hope of much return. That makes sense to a liberal. Why did we bail out AIG then? We let Lehman and Bear Stearns go down and why? Not enough bribe money spread around the Fed and Treasury? Geithner was in the middle of this mess and is now in charge. But, now, who pays for the refinancing? Oh, the taxpayers again? Our economy is crashing because of debt-deflation[18] and our government is wildly printing money and we need ‘reform?’ Who can reform Congress? The voters may tell us all about that in 2010.  

After some sob stories we come to this impasse:

“An Obama administration program to encourage the refinancing of loans owned or guaranteed by Fannie Mae and Freddie Mac, the government-controlled mortgage giants, is off to a slow start.

The Home Affordable Refinance Program, known as HARP, was designed to benefit between four and five million homeowners whose loans exceeded the value of their property by as much as 5 percent. But as of Sept. 30, only 116,677 loans had been refinanced.

“We’re refining our understanding of borrower behavior,” said a Treasury Department spokeswoman, Meg Reilly.” -- Interest Rates Are Low

Where is this money coming from??

It is difficult to understand this comment by Meg Reilly here but this is a possibility:

“"We are taking additional steps to enhance servicer[19] transparency and accountability," Reilly said. She said the goal was to increase the rate that troubled home loans were converted into new loans with lower monthly payments….”[20]

Where is the accountability of the home owner with respect to repaying the loans?? Nowhere. There is not the slightest interest in addressing the origins of this credit mess that allowed certain people to get homes for nothing  and now we are going to blame mortgage people when their clients default? This is some legal threat to lenders and they seem to be sensitive to this menace.

A testimonial by a servicer:

“Jeff Jaye, a mortgage broker in Danville, Calif., said only three of the refinances he submitted to the program were successful. More than a dozen were rejected for various reasons, including the existence of second loans or the borrower’s lack of equity.”— Interest Rates Are Low

So, his credit worthiness is crap? Why not refinance anyway? These are all metrics in the assessment of credit worthiness. Apparently, our government wants the banks to just lend and lend and lend and refinance ‘Main Street’ with abandon and let the deficits rise and ignore the debt. We are 12 trillion in debt and headed for 14 trillion with no known way to pay back the debt. There is not a single plan in Congress to even address our printing of money. Letters to my Senators yield nothing in return on this issue.

I think we taxpayers ought to be “refining our understanding of government behavior” as they cannot seem to understand the fundamental aspects of credit, the low class mentality and fiscal responsibility. I don’t think they want to and this is just a ‘soak the rich’ scheme along with Cap and Trade and other phony taxes that will sink our economy. That fits in well with the central tenets of Marxism anyway.

The banks are correct for not lending to deadbeats and untrustworthy types and illegal aliens. If we have another debt-deflationary spiral like the last one our currency will collapse and we will see anarchy.  Our government stupidly wants to ‘fix’ the debt problem with more debt. Soon New York and California will come begging for alms from Washington and we will just print more money.

Vote out these ghouls in November

rycK

Comments: ryckki@gmail.com