Remember that financial crisis? You know, the one that built up under Clinton and Bush 43 thanks to a rent-seeking Fannie Mae and a race-baiting ACORN? The one that nearly brought down the entire banking system? The banking system that had been complicit in selling trick mortgages to unqualified homebuyers who couldn’t even have afforded decent mortgages? And how the contagion spread to Wall Street as the crappy loans were bundled up with safe ones in risky credit-default swaps which the ratings agencies graded AAA so they could be sold off to unwitting investors?
That financial crisis? Autumn of 2008? We’re still reeling from it? Remember?
Well, hey, they haven’t forgotten about it in the White House, either — no, sir! In fact, the President himself is giving some serious thought to doing something about it already. Here’s the outline of the plan:
The administration has been working for weeks on how to implement a mortgage relief program. President Barack Obama could include a nod to the plan in a speech on job creation next week, sources familiar with the administration’s plans said.
The refinancing initiative would allow certain borrowers to refinance loans that are backed by government-owned Fannie Mae and Freddie Mac or the Federal Housing Administration, the sources said.
A broad-based effort to automatically refinance millions of mortgages is not in the works, yet the administration is looking to take targeted changes to an existing program that would allow more borrowers to take advantage of low mortgage rates, including allowing borrowers to refinance even if they owe a significant amount above their property’s current value.
The idea is to help struggling borrowers refinance at current low interest rates, which would cut their monthly payments and free up cash for other spending. The hope is that this could drum up overall business activity.
It looks — of course — like Fannie and Freddie and Wall Street get of scot-free in all this. And absent any real details, it’s impossible to say if the new plan will work any better than the old plan, which accomplished diddly.
Three years later — three years! — you have to wonder if even good plan is enough. Americans got raked over the coals by Fannie, Freddie & Wall Street. Then they got snookered by a new President who ran as a moderate but then used the crisis as an excuse to govern as a hardcore Progressive.
So after nearly three years of nada, don’t be surprised if Americans don’t respond well to the President’s plan — whatever it turns out to be.