Obama to Give People an Allowance to Pay Their Bills

You must remember this from your childhood:

Now, Billy, if you keep your room clean I will give you a dollar a week in allowance!

President Obama seems to be using the same tack for people to pay their mortgages:

Borrowers can get up to $1,000 a year for five years if they stay current on their modified mortgage payments.

What happens if you don't keep up with your mortgage?

Will he send you to your room without supper?

Pathetic...

Obama: Make the Loans Afford the Borrower, Not the Other Way Around

Normally, when one takes out a mortgage or any other loan, the lender (be it a bank, mortgage company, or your "cousin" Paulie), the lender tells you how much the loan will cost and you, the borrower, determines how or if you can afford the mortgage.

The lending business has worked this way for as long as humans have walked the Earth.

Obama wants to flip that paradigm on its head.

In Obama's world, it is up to the lender to match the loan to your ability to pay.

Huh?

The first step is solely in the hands of the banks and other mortgage servicers. They have to somehow get the monthly mortgage payments down to 38 percent of the borrower's gross pay. The government will not assist in that part, leaving the banks and investors to take a loss as borrowers' monthly mortgage payments shrink.

This move is as anti-capitalist as any move by Obama or any president.

In other words, if you bought "too much" house (a house that was too big, in a better neighborhood, had that 2-car garage) for you to afford, it is up to the mortgage lender to find a way to make sure you can afford it.

That's not the United States; that's Bizarro World!

We are entering an era where the U.S. government can establish the value of your house, not the housing market. But, only if you are in a preferred class that has not been established yet.

You asked for change; you got it.

Obama: Saves Adjustable Rate Mortgages with Adjustable Rate Mortgages!

President Obama released details of his plan to help struggling homeowners avoid foreclosure on their homes.

One aspect of the plan involves people who took out adjustable rate mortgages (ARM) a number of years ago. With the low interest rate offered by these ARMs, the homeowner could easily afford to pay the mortgage every month. However, when the rates adjusted up, as planned, the homeowner could no longer afford the increase in interest payment on the mortgage.

But, Obama has a plan to help these struggling homeowners.

He is giving them an Adjustable Rate Mortgage!

From ABCNews.com:

...3 million to 4 million homeowners with adjustable-rate mortgages, would be able to temporarily have their loans modified to a lower interest rate -- for at least five years.

Isn't this what got these borrowers in trouble to begin with?

Obama will give them a rate they can afford now, but in five years the rate goes up and they can no longer afford to pay the mortgage!

What a brilliant idea!

With this plan, Obama is guaranteeing that these homeowners will be in trouble again in five years, when he gets to do another bailout, or will pass the problem onto the next president.

Obama is helping people who are having difficulty paying their Adjustable Rate Mortgages by giving them another Adjustable Rate Mortgage.

You go figure it out. I have no idea....