American Politics

WASHINGTON (CNN) -- Even before President Obama unveiled his home foreclosure plan Wednesday afternoon, some Republicans and political commentators questioned how exactly it would work to stave off a crisis plaguing the country.

President Obama's $75 billion home foreclosure plan would benefit 9 million borrowers.

House Republican Whip Eric Cantor, R-Virginia, along with Minority Leader John Boehner, R-Ohio, sent a letter Wednesday to the president "seeking clarification on six important questions about [Obama's] broad housing proposal," according to a press release from Cantor's office.

Obama unveiled his $75 billion multipronged plan in Phoenix, Arizona, that seeks to help up to 9 million borrowers suffering from falling home prices and unaffordable monthly payments. The long-awaited foreclosure fix marks a sharp departure from the Bush administration, which relied mainly on having servicers voluntarily modify troubled mortgages.

In the Phoenix area, median home prices have fallen 35 percent in the past year.

Obama, according to the proposed plan, will make it easier for homeowners to afford their monthly payments either by refinancing the mortgages or having their loans modified. The president is vastly broadening the scope of the government rescue by focusing on homeowners who are still current in their payments but at risk of default. Read more on his plan

But there could be fierce resistance among Republicans and some conservative Democrats on Capitol Hill. See who's eligible »

Already, top Republicans want several questions answered, an early sign that Obama may once again face stiff opposition to the plan when it comes before Congress. Last week, not one House Republican voted for his economic stimulus package, and only three GOP senators voted for the bill.

The questions found in the letter from Cantor and Boehner to Obama include:

• What will your plan do for the over 90 percent of homeowners who are playing and paying by the rules?

• Does your plan compensate banks for bad mortgages they should have never made in the first place?

• Will individuals who misrepresented their income or assets on their original mortgage application be eligible to get the taxpayer funded assistance under your plan?

• Will you require mortgage servicers to verify income and other eligibility standards before modifying mortgages? Watch more on the home foreclosure crisis »

• What will you do to prevent the same mortgages that receive assistance and are modified from going into default three, six or eight months later?

• How do you intend to move forward in the drafting of the legislation and who will author it?

CNN political analyst David Gergen said some aspects of the proposed bill are not going to sit well with conservatives.

"If the administration does move forward with forcing lenders to renegotiate mortgages downward, there are going to be a lot of conservatives who are going ... to say that [this] 'cram-down' is a terrible idea," he said. " What it means is, there will be risk premiums put on future sales of houses, because lenders will say, 'I have got to get a risk premium, in case the government does this to me again.'"

Rep. Jeff Flake, R-Arizona, said Obama's plan "simply shifts the debt to taxpayers."
iReport.com: Perils of house hunting in the desert

"How will borrowing more money to pay for bad loans solve the problem," Flake said in a press release Wednesday. "President Obama's talk of individual responsibility seems to be at odds with the details of the plan."

Gergen also questioned the fairness of giving help to some mortgage holders that have been delinquent compared to those who are paying on time.

"What do you do about the couple that has been paying their mortgage ... and next door there's another couple that's been delinquent, that's been out spending money, going to Las Vegas, having a lot of fun time," Gergen said. "Is it fair to the first couple when the second couple gets bailed out?"

David Walker, the former U.S. comptroller, echoed Gergen's thoughts.

"Well, we clearly have to do something on housing," Walker said. "I mean, we need to do something to try to be able to help those that are deserving help, but not to reward bad behavior. We have to end the spiraling down of prices."

Obama's response to critics: The plan will not support irresponsible homeowners.

"It will not rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans. It will not help speculators who took risky bets on a rising market and bought homes not to live in but to sell," Obama said Wednesday. "It will not reward folks who bought homes they knew from the beginning they would never be able to afford."

• CNNMoney:  Housing fix will help many, but not all
• CNNMoney: Obama: Aid 9 million homeowners
• CNNMoney: Mesa, Arizona, a poster child for foreclosure

http://www.cnn.com/2009/POLITICS/02/18/foreclosure.plan/index.html

The questions found in the letter from Cantor and Boehner to Obama include:

• What will your plan do for the over 90 percent of homeowners who are playing and paying by the rules?

The point of this plan is not to compensate homeowners as a whole, or paying homeowners, but to keep homeowners (like my disabled grandmother, who refinanced 6 years ago when my grandfather died) who can no longer keep up with their payments, from going under and losing their home. (Especially considering for some of these people rent would be too expensive in the areas they live leaving them homeless.) This question is a fallacy as it questions things outside the scope of intent behind the bill.

• Does your plan compensate banks for bad mortgages they should have never made in the first place?

Once again this has nothing to do with the people it would be helping, some of whom like my grandmother, bought their homes years ago when they were making enough money, and through death or hardship refinanced in years before a market collapse. So while this is a good question, I believe we need to once again think of the people this good help, not the corrupt banks who may also benefit, who would be compensated with the property(perhaps worth more than the mortgage) anyways should evictions occur.

• Will individuals who misrepresented their income or assets on their original mortgage application be eligible to get the taxpayer funded assistance under your plan?

This is a reasonable question, but it condracicts the last question, by putting the burden of blame on the "irresponsible home owner" where the last question placed blame on the "irresponsible banker." We have all witnessed the corruption of the CEO's of banks using the bail out money, wouldn't it make more sense to bail out a poorly educated person who got into a bind through bad banking, than to give hand outs to the rotten lot that brought us into this position through poor gambling and bad business. Heal the man to fix the machine. This constant oiling of the system will only keep it together for so long.

• Will you require mortgage servicers to verify income and other eligibility standards before modifying mortgages? Watch more on the home foreclosure crisis »

This question does not consider that a person who made $100,000.00 in 2000, may have no job in 2009, or may make substantially lower income at least. Shouldn't they be the first people we consider helping in this current economic situation.

• What will you do to prevent the same mortgages that receive assistance and are modified from going into default three, six or eight months later?

First the fact is that by creating a lower payment, the owner will have less trouble making that payment. Second, is it resonable to expect the President to know how this plan will end up for every single home owner. NO.

• How do you intend to move forward in the drafting of the legislation and who will author it?

How did the bail out happen? This is irrelevant, completly. First of all, the fact that the politicians themselves aren't required to collaboratively draft every piece of legislation themselves is sad. If they don't write their own speeches, and legislation, they are not being true to who they are, they are puppets on podiums.

Did you have a question about the article posted or are you stating your opinion?

my personal critique of the flaws both in logic and lack of empathy in the questions presented.

Much better to let the value of all houses fall even farther.

Let's hope we put some of the financial people in jail for the irresponsible behavior!

Sage - Well then, in your opinion, what are the flaws in the logic and lack of empathy in the questions per the article?

Nico!

The first is that it would be better to allow foreclosures to save money.

A second is that businesses are not to blame, but it is all on the home owners.

A third is that banks are not interested in a solution to the problem.

Robert - in your opinion, who is responsible? It seems that there are a lot of people and institutions in on the greed bandwagon inticing, IMO, the consumer to open pandora's box... I know incitement is a crime - but is inticement? If not, then in this case it should be...

Robert, in your post before mine... I agree with one out of three. The last one.

Going to the dentist... EEEYYYWWW.... Back soon, I hope...

Hi Lena! 

I see Robert is back sputtering his insanity some more.

Much better to let the value of all houses fall even farther.

Markets decide that. If something is worth less, the price will fall. Nothing much you can or should do about that. What ever happened to the looney left demands for affordable housing?

Let's hope we put some of the financial people in jail for the irresponsible behavior!

For what crimes, exactly? And how did the people who irresponsibly took out loans for houses they couldn't afford escape blame here?

I see you start off with personal attacks once again.

So, when you become an adult, maybe people will be able to talk with you...

I couldn't help but notice you had no substantial response to my questions.

Because I did not read beyond the first line.

I am tired of your immature games.

When you grow up, I will treat what you say with respect.

An example of the workings of Robert's self-delusion:

Because I did not read beyond the first line.


As I'm sure all of you have noticed, Robert always fails to directly respond to the matter at hand in anything resembling a coherent and factual manner. He lives in a delusional world fueled by the bitter resentment caused by his miserable failure of a life, and cannot stand reality. In this example, he admits he never even read, and so did not even understand, the opposing argument. He just persists in his make-believe constructs.

Nico, the housing market now offers once in a lifetime opportunities, especially if you don't need to finance. 

Poor old man.

Just a minute ago, you were complaining I was too rich.

Were you deprived of oxygen at some point in the past?

Robert sill evades any substantive response to the questions I raised about his opaquely incoherent statements.

Ha. And why I don't bother with your games.

An insincere, delusional, cowardly bully, Jeffrey.

Nope, that wasn't a substantive reply either. Some of us are beginning to suspect you aren't capable of delivering one.

The scary thing is that this might work for you somewhere on the Internet.

I dealt with you before so I will not waste my time on you.

You are the charlatan.

Nope, that wasn't a substantive response either.

Nope, not that one either. I'm starting to join those who suspect you can't respond coherently to the issues at hand.

They believe the more obfuscation they throw out there the less anybody will notice they have nothing substantial to contribute.

I have dealt with Jeffrey before and it is the same old song and dance.

A waste of time to take him seriously.

He resorts to the same old tactics every time.

Why not criticize him for his immature tactics?

Are you his lackey or something?

Prices will again rise when liquidity returns to the credit markets, although not to the highest peak during the bubble. Right now, though, if you have cash you can make really unbelievable deals for houses you would never be able to afford in more normal times.

So you're not going to sit at home crying about how the government needs to give you a handout? Don't you believe in hope and change?

This is his first sentence to me: 'see Robert is back sputtering his insanity some more.'

Usually, he waits till he has been beaten some.

I am not wasting my time on him.

If he wanted a serious debate, he would not have started out as such.

He just plays games.

I will debate the issue with serious people.

Not people who will only waste my time.

It is fun and games~ of sorts~ to mis~represent what is going on in the world and to rely on simplistic limited readings, but others are more serious and wish to fix the mess some have gotten us in.

Can you direct us to an instance where you managed to rationally and coherently debate something?

Of course, I knew you couldn't because it never happened. Again, you provide us with an example of your projection - in this case projecting your incapacity for rational argument onto me as a means to evade my arguments while supporting your delusion that you are right.

Sure, Jeffrey.

It does make it easy for you, doesn't it?

What's the big CEO, the trademarker of huh?!, arguing on the Internet for?

So where is this example of your rational debate? It almost seems like you're trying to divert our attention. 

If rational debate were possible with you, I would attempt it one more time, but it is not, so I will not.

I will just note that you again failed to direct us to any example of your rational participation in a debate.

Back to the arguement, some fallacies and such in those questions I pointed out in my some what long winded critique of them. Most of the questions are asking things outside the scope of the bill, so, what will this bill do for 90% of homeowners playing and paying by the rules?, does not follow the intent of the bill. This is a red herring type fallacy, it would be like me asking of president bush, "how will the war in Iraq aid 90% of the people being subjected to terrorism?" since terrorism in Iraq was not the original cause for concern this question is ignorant for assumming so. Another problem is the relevance of some of these question as previously noted on the final question about who would draft the bill.

Then let's ask a more fundamental question:

Why should taxpayers, many of whom are working hard to make ends meet, but were smart enough to take out mortgages on houses within their means, have to give up their hard-earned money to pay the mortgages of irresponsible people who bought bigger houses than they could afford?

some people, like my aunt(who was a landscape architect), worked making 80,000.00 annually, and now have lost their jobs, and can't find a new job, so they would have to sell their home, or lose it.

Good question Jeff!

You assume some one having trouble today making a loan payment on their home should have had that trouble last month or last year. As we go deeper into recession jobs are being cut, once employed people are losing their jobs.

in what ratio our tax dollars are spent, then Jefferey could give his all to military, and I could put mine toward schools, health care, and social welfare

Actually, Sage, the dynamic was a bit different from what you suggest. The current recession has its roots in the subprime meltdown. That meltdown preceded, and caused the recession that led to your Aunt losing her job.

The subprime implosion resulted from too many people with bad credit overextending themselves on houses they couldn't afford once the adjustable rates they signed up for began to increase. That accounts for the bulk of the foreclosures, which means the bulk of the bailout money will go to those people.

let's start a petition

Petitions are not always what they seem. I say it would take more than a petition... JMO

Well I have excellent credit, but I would not take on the type of mortgage sold to those who did. Like a credit card's terms, wherein the holder has a late payment for any reason their interest rate can jump ten or more points. Some cc companies do this for other accounts of the holder as well.

It was a suckers bet for the borrowers and a guaranteed windfall for the lenders. People want to own a home, but I feel they took the suckers bet hoping to get through, and the lenders sat and waited. The surprise seems that the fall came all at once rather than a little at a time as expected.

This is my opinion as I am not a financial wizard.

This capitalist system is not democratic. People like my parents work their lives away in wage slavery, never to own a home, living pay check to pay check to feed their family. While others inherit a fortune, and can be intellegent with it or squabble it away, often times trusts insure the latter does not occur as easily. If land is to be owned, everyone should have that oppurtunity, not only the fortunate ones. So long as wealth is distributed so unequally there shall be power on the basis of capital, human health and environmental rights violations in the name of saving a penny(since a fine doesn't make loss of profit, if a fine is made), and a proliteriat class sometimes sick and hungry, sometimes working their arses off to hardly make due.

This capitalist system is not democratic.

Yes it is... It's true...

Here's some homework...

http://www.importanceofphilosophy.com/Politics_Capitalism.html

So do you think Capitalism is good? Also do you recognize we have never had truely fair trade. There have always been regulations on our domestic and foreign trade, even without those, capitalism would not play out fairly on a social level as far as I'm concerned. There will always be bosses, who are no better a person, who through a course of choices became "more qualified" to hold that position, and who are sometimes corrupted by greed, as they grow obesely rich.

Better yet - HONK if you are paying for the losers welfare programs who bought houses they could not afford!

BEEP BEEP!!!

Didn't you read the link I posted for you? I may help you to understand what capitalism is and how it benefits us as individuals...

I read your post. I already understood the definition of capitalism. There are a few problems as I said earlier: There has never been a true free market. There have always been regulations on the market. So, like communism we are not a true Capitalist society. Some may say freeing the market would make it healthier. I say that if the market were more free there would be more corruption more pollution less safety for workers. Read a book called The Jungle by Upton Sinclair. It was written in 1906, 13 years after the countries major depression of 1893, and brought out the truth about factory conditions for workers, sadly as Sinclair said, ' I aimed for the hearts of the public, and instead by accident hit them in the stomach.' Which resulted in food regulation, but not better, safer working conditions. Point in case, capitalist societies have abused their workers as much as any one else, and it has been the break away from capitalism that has insured better quality. You see Industrial Capitalism is all about profit, and quantity; quality is thrown out the window.

Sage - In reading your post, I am confused... Can you please define and explain to me what it is you are saying about Capitalism? Are you saying that Socialism (Communism) is better for a free democratic society? Are you saying that Socialism provides us the freedom of democratic government to be who we want to be and to profit freely from a socialist governments intent to rob us of our hard work?

Please explain to me what you mean? Again, I ask you, did you read the homework link I provided?  

Oh yes... One more thing... The following from your post above, really needs more enlightenment...

Point in case, capitalist societies have abused their workers as much as any one else, and it has been the break away from capitalism that has insured better quality. You see Industrial Capitalism is all about profit, and quantity; quality is thrown out the window.

You have really confused me on your view. How did you come about this information? I am very interested. Can you provide me a reference so I can read up on it more?

My 2-cents on the housing bailout. The market prices dropped for a good reason: those houses aren't worth anywhere near what they were priced at. The problem was caused by this so called "American Dream" that supposedly can never be fulfilled unless everyone owns a house. The government with the best of intentions tried to make the dream come true with Fannie Mae and Freddie Mac. The government screwed up so it makes some sense they should try to fix it. But they should only try to fix it if there’s a reasonable chance of success. In general, spending amounts like the government has been doing should not be taken lightly; it should be discussed at length. I'm not sure that these 6% they think can be saved won't just default later. Trying to shore up a “house of cards” may not be a great idea.

It sounds uncaring but sometimes it's better to cut your losses. I've rented over half my adult life and in every case it was cheaper than owning a home. There is a mechanism for declaring insolvency and it's not a death sentence. I have a daughter that made poor choices and is facing this choice.

I wish our elected officials would just stop, step back and think about how to deal with these issues in a way that doesn’t damage our economy for decades.

What did you expect to gain about posting an example of things 100 years ago. Like Lena suggests your ideas confuse more then enlighten. There is constant change in opinions offered. And are you jealous of those who were born wealthy? Why? Possibly some member of the wealthy had to work in order to gain the things you rebutt.

Why complain, you are in college,  along with your spouse and should due very well in time. Under a communist system this may not be possible. You have an opportunity to work for changing the things you dislike by holding a positive outlook, something yet to witnessed. Negativity begats.

A question to Jeffery inquiring if he was a CEO was rude. Obviously he is successful in his way and this is because he doesn't flout a positive outlook. If he's rich, good for him. People are invited to jump in and improve themselves.

Both my parents, now deceased, lived through the market crash of 1929 and the depression that followed. My father never missed  one day of work, nor did my mother except to bear children. We were raised to try to succeed in life, not to complain about it. I have no doubt your parents did the best they could and overcame odds not always fair. My Father made at most between $25,000.00 to 35,000.00 in the fifties and sixties, not much for later years, and I never heard him say he felt cheated.

Don't be a complainer Rossage, be a Gainer.

John,

Your last comment struck a note with me. My parents also grew up during the depression. My Mom's family came from Switzerland and were dirt poor. It's a mistake to think that Roosevelt was a hero to all the poor. Mom’s parents didn't like the idea of government handouts and didn't accept any welfare; that was not the American way she told me. My Dad served in the army in WWII, went through the Normandy invasion, and like your Dad worked his whole life not making much money (he was a cop). I also never heard him complain.

What’s happened with our country? I was watching Huckabee the other night and he hit the nail on the head. Our parents generation was willing to sacrifice for the future generations; the present generation is willing to sacrifice the future generations for their own benefit.

My sister gets public assistance, has cable TV and a big screen. Something doesn’t seem right here.

 Dan

It seems people knew the worth of a dollar back then and what sacrifice was truly about. My grandfather died leaving my father and his brother to be placed in St. Mary's Industrial School in Baltimore. That's where Babe Ruth spent some of his childhood. There were two sisters which were not placed anywhere, so imagine how boys ten and nine felt. Dad stayed until sixteen, seven years, then left. The end of any formal education. My mother, one of six children worked in a sewing factory from eleven and went to school til ninth grade. At sixteen both had a crappy life. That was 1922, people didn't need alot. They had their first color TV fifty years later when I bought one for them.

People made do because they learned how. My Pop worked at Bethlehem Steel, plus drove a bus, helped build the Harbor Tunnel all while on strike at Beth. Steel.  Like your parents, they never took something they didn't work to earn.

A much different idea exists today. Somewhere THE ME  FIRST came into being and never really let go. Also, we must have the same sister.

Pleasure to converse with you Dan, hope to continue!

John

Sometimes I look for replys to things I post, and most time I don't find the things I post let alone an answer or comment. Am I having my posts deleted?

No Dahling... If you were having posts deleted, they would be in your inbox compliments of the c2 admins...

Unless you posted second or third to a thread and the initial post was deleted, then the only one who would see it would be the initial poster...

Which post are you looking for? I lose mine all the time...

John! My father worked at J&L, Bethlehem and Jorgenson! Wow... All his life he worked in the mills until the mid 80's then he took a job as an electrician at the mills and just before retirement he worked in the LA school district as a maintenance electrician...

For the past few weeks I have difficulty recalling my name...true! It seems somethings I've commented on or questions asked on certain threads, have gone south. Perhaps my imagination, but I do appreciate your reply!

Like Ralph Cramden said to Alice, "Baby, you're the Greatest"

Funny how Bethlehem fits in there, My Dad operated an overhead crane. Small world at times.

John

So did my Dad before he did the electrician thing! Wow... How can you forget your name, Toots?

Too much "Goofy Gas"!

"Put em altogether and what have you got, I can remember my name......NOT!

I have a 1 in 99 chance of being normal again-hells bells I don't want to be normal curmudgeon!

Well if this is the way you are by NOT being normal, then I hope you are never normal again because you are just awesome the way you are now!

A foreclosure will demean the value of another's, one's house, and a bank would rather have someone in a house than to own an empty house.

But we should allow complete free trade. Cut all taxes and give guns to the poor. Let's see what happens.

Government giving away guns is not free market.

I have no problem with banks changing the terms of a loan to keep somebody in a home if they decide to do that uncoerced. That is no way comparable, however, to the government stepping in and making those decisions for the bank. 

Always the literalist!

Let us see what happens with complete tax cuts, while the poor have guns.

Banks weren't forced to give bad loans in the first place. Banks want to be able to negotiate with people to stave off foreclosures.

People who own houses should want the value of their houses to remain and be able to go up. A foreclosure in a neighborhood would drop the value of houses in the neighborhood. Could increase the number of foreclosures, resulting in a downward cycle.

Just as with job cuts decreasing the number of people who are able to spend, which leads to more job cuts.

Republicans' ideas have lead to a downward cycle~ hidden by speculation and short term gains, and large successes of a few from this.

You're making things up again. What do you have against reality?

Which part am I making up?

cannot listen to reason. Our words are not heard here blackcat.

You cannot hear me, clearly. I said twice the problems with capitalism. Here is an example that may hit home with you. In this country, we send jobs overseas since the people there can legally work for lower wages than those paid at home. That means bigger profit, less local, more quantity, less quality. Not that those overseas aren't as capable as all of us, but when they are trained to slave away to make shoes, or toys, or answer phones, it is a job of speed, not technique.