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Thursday, March 05, 2009

Lunchtime Diversion

On the previous post, YT asked a most disturbing question about income limits for the various government-subsidized mortgage programs. I was shocked and horrified at his bad taste in doing so. To add to the general tone of harshness, Idomenes asked a most rude question about previously misstated incomes.

My dear friends, when we are bailing out a country or its banks, we do not have the time for such pettifogging details. As explicated by the genteel Sheila Blair, the only proper thing to do is help these poor borrowers without asking any rude questions in order to help ourselves. That is the IndyMac plan pushed by Sheila Blair, and that is the plan the government has basically adopted.

Oh, oh, I know some rude people may think that the government shouldn't be going 50-50 for 5 years on the cost of taking mortgage payments from a 38% front-end ratio down to a 31% front-end ratio, thus funding interest rates of 2% on $729,250 first lien mortgages, plus paying the servicer a thousand down to do it, plus a thousand each year that the modified loan performs for three years, plus paying the borrower a thousand a year for five years if the borrower will deign to continue making payments.

I realize that some of you feel that this is inapplicable, if, for example, that loan was originated with fraudulent representations of income. And maybe it irks some of the peasantry to discover that they are now paying large sums of money to massively cut payments on first liens up to $729,250, especially since the borrower may have large "illiquid" assets into which the borrower is not required to delve. Indeed, some of you may darkly suspect that borrowers who took out liar loans in the first place may not be exactly truthful when filing affidavits stating that they have no other significant "liquid" assets with which they can pay their mortgages.

How can you be so petty? T. Coddington Van Vorhees VII is justly appalled at what this country has become, and fortunately, Obama shares his views.

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