Forbes: Obama Oversells His Mortgage ‘Rescue’
According to Forbes Magazine, the Obama administration is overestimating the number of homeowners who will be helped by their mortgage plan. Instead of helping 9 million homeowners as Obama claims, the greatest number that could be helped is closer to 5 million:
President Barack Obama plans to spend $275.0 billion to rework or modify up to 9.0 million troubled American mortgages, but his program isn’t likely to help anywhere near that many people.
The U.S. government recently launched a two-pronged plan to stem mortgage foreclosures, which have been rising as a result of the housing crisis that began in the subprime loan market. One is aimed at wobbly borrowers who bought too much house. The other targets borrowers with better credit and homes that have fallen in value, getting them lower payments on existing government-backed loans.
But it looks like the government will only be able to massage about half of the mortgages it says it will. Partly because it’s being too optimistic about modifications according to people familiar with the matter, and, on the refinancing front, because the numbers just don’t add up…
While the Obama administration says it will use taxpayer money directly to encourage borrowers and investors to rework 3-4 million subprime loans, no more than 2 million are likely to cooperate. And while Obama promises to refinance about 5 million FNMA/FMAC loans, there are no more than 3 million eligible for refinancing. So while Obama promises to help 9 million homeowners, the fact is that he’ll help no more than 5 million.
And the total cost to taxpayers is estimated to be about $275 billion. On top of the trillion dollar stimulus bill. On top of the $410 billion omnibus bill. On top of $500 billion for transportation projects. On top of the bill for nationalized health care. On top of the bill for the second ‘stimulus.’ On top of the TARP II plan. On top of education ‘reform.’ On top of cap and trade. On top of the energy rationing plan.
And even while Obama lies about his plan and sticks you with the tab, his administration is hiding information about the mortgage plan from the press:
Amy Bonitatibus, Fannie Mae spokesperson, told Forbes that “consistent with what the Obama administration has said, we estimate millions would be eligible for the program.” While acknowledging that more granular information is available, she refused to provide it.
Brad German, a Freddie Mac spokesperson, said “The only estimate we have is the one from the Treasury, 4 to 5 million for both companies.”
The Treasury refused to say where it got its estimates.
Just another example of the openness and transparency that Barack Obama has brought to Washington.