Obama Administration To Extend Mortgage-Free Living For America's Unemployed To One Year

Tyler Durden's picture

Last week it was discovered that the means by which various big banks are dealing with the Option ARM cliff is by enforcing outright mortgage debt forgiveness, in some cases as large as 50% of the total principal.
Which is why it should come as no surprise that the administration, in
dealing with the lack of an unemployment cliff, has decided to extend foreclosure-free living for unemployed homeowners from a few months to a year. From USA Today: "The
administration today will announce that two programs providing
unemployed homeowners a few months' forbearance on their mortgages will
be extended to 12 months, said three administration officials speaking
anonymously because the program has not been announced. Thousands of
homeowners could benefit from the additional time, although not all
jobless homeowners will be eligible. The action is being taken as part
of the administration's effort to help prevent foreclosures while
unemployment remains above 9% and the economy struggles to rebound." What would be great if in addition to such openly
socialist policies the administration would enforce the implementation
of sinking funds for said unemployed workers, who instead of taking
unemployment benefits from the government and converting it into less
than edible iPads, would actually set aside money for that eventual
mortgage payment. Of course that will never happen: after all why
redirect freshly issued fiat from being recycled into the economy and do the responsible thing when nobody in America expects to pay their mortgage
payments ever again. And some wonder why retail sales in June came as
blistering as they did. Simple: when the US consumer no longer has to
spend any money on the biggest traditional use of capital, housing, the
alternative is everything else. And for those attempting to figure out just how this
is deflationary (for everything but housing of course, but that's one
deflation that will only hit the pocket of Uncle Sam), we would kindly request an explanation as well when someone has an answer.


The Federal Housing Administration began offering four months of mortgage relief to unemployed homeowners nearly a decade ago. Banks and mortgage brokers participating in the program must comply with the new standard. The Home Affordable Modification Program has been offering three months of relief to the unemployed since last year. Those who service mortgages under the program are expected to follow its voluntary guidelines.

To qualify for mortgage forbearance, unemployed people must be looking for work. Those who can afford to pay a portion of their loans must do so.

Skeptics about this program should shut up: it is a "win-win" for everyone. Because in Obama-style economics zero sum is no longer relevant.

The revised programs are intended to be a win-win for borrowers and banks, which can avoid having more homes go into foreclosure by giving borrowers more time to pay.

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Stuck on Zero's picture

A bit of moral hazard but that should not stop the advance of Socialism.

MarketTruth's picture

ITS TRUE!!!!!!!!!!

Obama Is Going To Pay For My Gas And Mortgage!!!


hedgeless_horseman's picture

It isan Obamanation, on a glide path to global equalization. 

Soon, we will all be equal with Nigerian Goatherds.

Fish Gone Bad's picture

Run by the Obamonster.  Speaking of monsters, that comment he made as a senator about "a failure of leadership" (by raising the debt), is really going to bite him in the ass.

TheTmfreak's picture

Don't make definitives about what should obviously be true. (about it biting him in the ass). I have certainly learned (more in the last 3 years than ever in my entire life) that regardless of the OVERWHELMING evidence to suggest somebody is a total pos, people will still like them and ignore it anyway. I saw a black woman the other day with an obama shirt on. Why exactly? Rooting for your guy? What exactly is "your guy" all about other than being "black"?

There are times when you have to take a step back and say you know... there are some dumb truly ignorant fucking people in this world.

Fish Gone Bad's picture

There are truly some real pieces of work out there.  Obama is not one of them.  He has the gift of eloquant speech.  It will be his undoing when Republicans play the "Failure of leadership in raising the debt" speech over and over again.  Obama will be caught talking out of both sides of his mouth like the slick politician he is.  It could very well be his undoing.

66Sexy's picture

BTFD this is F'ing bullish.

All that money wasted paying banker tribute can now go to the real economy. Corporations can still dictate inflation and raise their bottom lines. The money flows from bankers to corporations (same folks) back to the bankers through bailouts.

Big banks are TBTF... we've already established that. The financial industry IS the government now, and the corporations can freely loot it. It is clear the banks are being thrown to the wolves, becasue they cant fail. Hell, now it's legal.

More folks should just default, stop working altogether (so they dont have to pay the taxes that will be needed for the banker bailouts), and spend spend spend! Its the new economy.. a bit socialist, but fuck it, it puts everything off until mid 2012.

dark pools of soros's picture

the bankers don't care since they already flipped them into crap securities and dealt them away to the FED..  who will shove them into pension funds or just let them rot..  who cares..

That Peak Oil Guy's picture

I think I speak for all of you when I say, this is fucking nuts!


1100-TACTICAL-12's picture

 " He has the gift of eloquant speech".  Bullshit I hear that crap all the time. He sounds just like some jive talkin punk , from ford heights,

docj's picture

Indeed. I've never in my life felt more foolish for 1) buying as much house as I needed but less house than I could afford and 2) making sure my mortgage to a TBTF bank was not only current but paid-ahead a couple of months.

Pity there's no free give-aways for me, eh?

Ray1968's picture

You are probably not in his voting constituency. This is a payoff. Chicago politics at its best.

docj's picture

You're right - I'm not.


Fish Gone Bad's picture

At the end of the day, your side of the sidewalk of life is pretty clean.  Trying to control the bad behaviour in others is a fools errand.  You are an upstanding citizen, be happy with that.

dark pools of soros's picture

his deadbeat neighbor probably has plenty of time and money to care for a much better lawn..  make sure you harvest japanese beetles in yours so you can attack anything he has time to nurture...



Ray Elliott's picture

Sir:  Are you suggesting that the President of the United States is involved in skullduggery?

Dantzler's picture

I hear you, docj.

Personally I look forward to being able to redirect my mortgage payment cash flow towards more productive things once I pay it off ahead of schedule. I'm thinking a nanobrewery for starters.

Even if other people are getting free shit, I only have to look at myself in the mirror each morning.

karzai_luver's picture

you are nuts if you are paying ahead a couple of months.

THere are better uses of that money.


That you still have a mortgag with a TBTF bank brands you as just another

sheep anyway.

Bitch bitch bitch , but no action.


Dantzler's picture

Get bent, kl.

One has no control over what happens to a mortgage after closing so even those who went with a non-TBTF can have their mortgage sold to one.

Furthermore, if one starts with a 30 year @ 6.5% and through refinancing goes to a 15 year @ 3.7%, the interest paid to the bank goes from $300k to under $80k on a $200k principle (even less if accellerated). That is action right there.

Each chooses his or her own path - what are YOU doing other than snivelling in the comments section?

cartonero's picture

++, kl

I'm also amused by posters who point out how manipulated the markets are and then go on and on about how they're going to play them.  Just get out.  The only way to win is to not play the game.


Id fight Gandhi's picture

Other than gold and silver, just holding cash is a losing bet. Costs go up on everything, the dollar falls.

I don't care if a new flat screen costs $200 less than last year, I care how much my housing and food bills are. Savers and people just getting by are screwed.

docj's picture

Well, not that I feel the need to justify how I handle my finances, but here you go. I'm a year ahead on my 15-year mortgage, though now I'm paying the minimum and, as you suggest, directing the extra to more productive purposes. My payments are now roughly 70% principal, so if I out of principle want to dump my TBTF mortgage and go with a non-TBTF bank (good luck finding one of them, by the way) I reset back to paying roughly 50-50 prinicpal and interest.

In other words, I'm paying myself back now. Citi has already gotten about 80% of what they're going to get out of me at this point.

Go troll somewhere else.

Prometheus418's picture

Don't be a dolt.  

I bought my house when I was 23 years old, and do not have the money to just pay it off whenever I feel like it.  The only options right now are to keep on plugging away, or default.  

I view default in the same light as leverage- TANSTAAFL.  Go ahead and stop your payments if you like, but don't come bitching if it doesn't work out the way you had hoped.  Lots of silver longs got scalped buying with leverage in May- I still got my physical, and it's all paid for.

Guarantee you when the time comes, I'll be right on the front lines- but the time isn't here yet, and despite the intellectual view on it, I'd rather it never comes.  Anyone lusting for a fistful o' silver dollars and a sixgun needs a brain-check.  If it has to happen, and I think it does, it will ugly and horrifying.  We will *not* be telling our grandchildren stories about it, and most of us will be dead.

That alone makes kicking the can somewhat worthwhile, so long as that behavior comes with a end date.  While the sun is still up, I'll keep stacking, canning and reloading.

LudwigVon's picture

I still got my physical, and it's all paid for.

I don't understand? Silver is money. You mean you exchanged some fed dollars for some physical (money).

66Sexy's picture

"If its the right thing to do, you gonna lose"

"The foundation of every human relationship? If you aint takin', then you gettin' took."

Page 661, Obama Administration Code of Ethics.

legal eagle's picture

The US is just backasswards.  Yes, those of us who are current on our mortgages have just one more reason to tell them to fuck off and stop paying.  The government and banks caused the bubble in real estate, not me. Why should I continue to ride the value of my real estate down to zero and pay for a house when the government is giving my neighbors theirs for nothing?


I Got Worms's picture

I rent. I wonder how long before my shit would be sitting in the front lawn if I fell behind. Would the Long Legged Mack Daddy pay my rent if I hit a rough patch, or just rented in a nicer neighborhood than I could afford? Fuck me. Maybe the New Madrid fault line does need to open up and swallow this shell of a great country, and leave it back to the critters.

riley martini's picture

 I don't think it advances anything except the can . Kick the can and paper over the fraud ,theft and general corruption .

Weisbrot's picture


reward the corrupt (bailouts)

reward the incometent (bailouts)

reward the stupid (bailouts)

penalize those who do the right thing (tax & mortgage payers)


isnt that the road to hell?


USSA is on the way................




Popo's picture

Further proof that Obama is completely opposed to affordable housing.

buzzsaw99's picture

Loser preznit trying to buy an election by siding with deadbeat grifter-losers. Pitiful.

trav7777's picture

entire blocs of them are locked up in his corner.  Obama goin pay mah mortgage Obama gonna pay for mah gayus

Conrad Murray's picture

None of this should come as a surprise. One just had to understand what Obarry believes: http://www.youtube.com/watch?v=xcXFxbx1Y4M

Max Fischer's picture

Ok, so you (and many others) are implying that Obama is guilty of instituting policies that favor blacks and the down-trodden, but this seems to contradict nearly everything that's written by the doomer libertarian hillbillies in the ZH comments section on a daily basis. Every day, the ZH hillbillies make disparaging comments accusing Obama of being just another puppet for the bankers and plutocrats.  How many times have we read that Obama = Bush = Clinton = Bush = a totally unfair, oligarchical society that favors the rich at the expense of everyone else.....

Even Cornel West criticizes Obama for not caring about black people: “… He doesn’t care about the Black poor: The evidence is overwhelming! … His policies [a]re racist in effect and consequence and especially classist in terms of generating misery among poor people, disproportionately Black and Brown. … The Obama Administration seems to have very little concern about poor people and their social misery: Look at the policies vis-a-vis Wall Street...."

Yet, here you (and others) are, implying the exact opposite: that Obama's policies favor blacks.  Just which policies exactly are you referring to?

Libertarians: We hate everyone!

- Max Fisher, Civis Mundi 

That Peak Oil Guy's picture

Approaching election season, have to pander to the constituents.  There is probably some way this is still good for the banks as well.


whstlblwr's picture

Exactly, you are right, Obama policies favor elite (bail out Wall Street, who now take over country) and chronic welfare (people who take advantage of system).

His policy favor those to manipulate and take advantage, not honest US workers, savers. Definitely Not savers or traditional view of capitalism.

Okay ZH community. We must elect Ron Paul. I hold my nose, but he bring most of change we want. Abortion budget piss me off. He libertarian but want to tell woman what to do with body? WTF?

New poll in Texas show him beating Perry. Now media ignore him, elite scared so need make sure he covered.

Max Fischer's picture

....honest US workers....

Like teachers, policemen, firefighters, etc.?  If memory serves correct, the ZH libertarians hate them, too. Or are you talking about blue collar manufacturing jobs like the auto industry?  Nope.  ZH libertarians hate them, too. Private unions, public unions...doesn't matter.   

Hillbilly libertarians hate everyone: The rich. The poor. The owners. The laborers. Teachers. Firefighters. Police. The entire military industrial complex.... just about fucking everyone.  

Libertarians:  We hate everyone!  

- Max Fisher, Civis Mundi

whstlblwr's picture

I not aware that here. There are policemen and firefighters that post here. Problem of auto industry is auto BAILOUT maybe it need fail to make room for better business. Have you seen crap GM car, pure crap.

But sound like you like to keep bailout coming for you. Argument weak with calling names, who cares about hillbilly, gay, Jew, black, Muslim, Catholic? Point is this is bailout nation. Without sucking to government tit can you survive?

FinalCollapse's picture

Fuck off. It doesn't matter dem/rep/libertarian/left/right/black/white/pink, etc. 

We need someone with balls, to stand for the people who elected him, and put all financial criminals behind bars, with Bubba in the same cell.

Obama is not. No balls, no brains, no integrity. Big Zero. He is like the 007, with '7' lost.




Hacked Economy's picture

Hey Max,

I'm conservative with a mild libertarian bent.

I destest the teacher union bosses, but not the teachers.

I detest the public service union bosses, but not the firefighters or police officers.

I detest those who use their wealth to control others, not those who are simply wealthy.

I detest those who are able-bodied and yet sit on their asses and live off of welfare, not those who are genuinely poor and are trying to improve themselves.


And I detest morons who come here and spew comments that show their own hatred...of Libertarians in your case.

Get a life.  Only two weeks into your Fight Club membership, and you're already actively making enemies here.  Not too smart.

Prometheus418's picture

I'm a libertarian, and I don't hate anyone.  In fact, I think everyone is more or less evenly equipped to handle their own business without me poking my nose in it.

It's when you want to control others, and they won't comply, that you learn to hate.  Don't believe it?  Ask a seasoned social worker what they think of their "clients."

Max Fischer's picture

We must elect Ron Paul. I hold my nose, but he bring most of change we want.....

Do you realize how pathetically hilarious this is?  Libertarians supposedly believe in freedom from the government, yet you're all too lazy to fight for it yourselves. You want a "different" politician to hand you your illusion of freedom on a silver platter, wrapped with a red bow.   


If you were true libertarians, truly believing in your own freedom, you wouldn't hang your hopes on another politician to give it to you. 



- Max Fischer, Civis Mundi

whstlblwr's picture

Not anarchist. This is definition of libertarian,you not know what talking about.

Libertarianism is a political philosophy that upholds individual liberty, especially freedom of expression and action.[1] Libertarianism includes diverse beliefs and organizations, all advocating minimization of the state and sharing the goal of maximizing individual liberty and freedom.

I mostly past Republican. Not now. My wife Obama past is voting Ron Paul too.

We have election system, we use it. What you do?

Hacked Economy's picture

Hmmm.  Your English needs improvement, but your statement is correct.  I agree.


BigJim's picture

If you were true libertarians, truly believing in your own freedom...

Look who knows so much!

RockyRacoon's picture

He libertarian but want to tell woman what to do with body?

You are correct in one aspect only, he does not favor abortion.   However, he does not advocate a governmental role in the decisions.   It should be left to each State to decide.  He is a medical doctor and knows the mechanics of the situation.   I forget how many babies he says he has delivered.   I am personally in favor of women/doctors doing whatever the hell they want, but I'll go along with the State's Rights concept wholeheartedly.

Hacked Economy's picture

True, Rocky.

I'm solidly pro-life, and I believe the Fed needs to get out of the abortion business.  Such decisions need to be handled by the States.  If you're pro-abortion, then you move to a state that allows it.  If you're pro-life, then you move to a state that does not. 


Cognitive Dissonance's picture

I'm solidly pro-life, and I believe the Fed needs to get out of the abortion business.

I'm assuming you mean Federal Govt and not the Federal Reserve? Just checking because around here "Fed" usually means the Federal Reserve.