Okay, so you want BIG IDEAS in the ballywhooed Obama jobs plan to be unveiled in the next week or so? Well, here's something REALLY BIG to chew on and it's not just blogger speculation...it's banker speculation!
...Jaret Seiberg, analyst at MF Global Inc. , in his report Monday. Seiberg said it could be a proposal announced by President Barack Obama as part of a post-Labor Day address about jobs and the economy.
“The administration is desperate for ways to revamp housing. The one idea that doesn’t go away is a mass refinancing program,” he said in a report.
(Some analysts believe that the Federal Housing Finance Agency, which oversees government-seized housing giants Fannie Mae and Freddie Mac, could implement such a program on its own without statutory authority).
To sum up the article from Marketwatch (a DOW rag but without the WSJ editorial staint). Federal Housing Finance Authority is the Czar-like overseer of the vast Fannie and Freddie mortgage portfolio. Theoretically, FHFA could, by fiat, mark down the interest on all of it's paper to 4%. If you have a house with a 7% rate and a $140,000 balance, you would thus save around $3000 a year (depends on if they totally restructure or simply change rate).
This would effectively be a $60,000,000,000 stimulus check effecting half the homeowners in the country. It is not "fair and balanced" because it would help those who need the most help, moster.
Many homeowners who are unemployed, have poor credit or who owe significantly more than their homes are worth currently can’t refinance, but would be permitted to use such a program.
Since Fannie and Freddie steer away from super jumbo and commercial loans this would be very targeted stimulus to families. Those who are underwater, underemployed or just plain screwed with high interest from an ill-conceived loan will reap the majority of the benefit.
Costs will exist but if this keeps people in their homes who might otherwise walk... well, that makes sense on too many levels to count. This will mean "FOR SALE" signs coming down and property values going up as folks now won't want to leave their cushy mortgage.
And yes, it does appear the WH is seriously pushing this idea:
"...The administration is trying to overcome FHFA’s objections by arguing that the short-term additional costs are outweighed by longer-term savings.”
I want to see this as a major part of the Presidents jobs plan as legistlation, and if it does not get a fast upper-down vote... just do it as an administrative order. Of course the GOP would shoot it down, making the direct order a huge progressive publicity splash that would soak down American families across the board, RedState and BlueState. Real, after-tax dollars in the pockets of the lower 80% who can really use it.
That's BIG. Just one thing... but it's BIG. If you want to bug your POTUS or congress-critter, this would be a good item to mention.