Senate gives money to rich people. Occupy Dems APPROVE

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bugscoe

Senate gives money to rich people. Where’s the #OWS outrage
Posted by Soren Dayton
Friday, October 21st at 3:29PM EDT

Today the Senate voted for an amendment to give a subsidy to rich people. Not the first time, and it won’t be the last time. But is a perfect microcosm of today’s politics and the politics that got us into the housing crisis. Next time any of the Senate Democrats say anything about “Occupy Wall Street”, they should get asked a simple question: if you are so worried about the 99%, why are you subsidizing housing for the wealthy.

Here’s what happened. Senators Bob Menendez and Chuck Schumer, who represent rich Democrats in New Jersey and New York respectively, offered an amendment to raise the amount of a mortgage that Fannie Mae and Freddie Mac will backstop. The level that was backstopped by Fannie and Freddie was lowered to $620k, but they raised it again to $729k. So the government will offer a loan guarantee so that people can buy a $720k house. From Bloomberg:
The U.S. Senate adopted a measure that would raise the maximum size of a home loan backed by mortgage companies Fannie Mae, Freddie Mac and the Federal Housing Administration to $729,750.

Senator Robert Menendez, a New Jersey Democrat, offered the increase as an amendment to a spending bill today. The measure was approved less than a month after the limit on so-called conforming loans was automatically reduced to $625,500.
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Now in the lefty narrative is that Republicans vote themselves more power and more money, but that’s not what happened here. There were 38 votes against this upper-middle class subsidy. All Republicans. Every Democrat voted for more federal money for rich people.

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http://www.senate.gov/legislative/L...ote_cfm.cfm?congress=112&session=1&vote=00180
 
I don't think this is really a subsidy for the rich. Jumbo loans cost more, hence the rich are paying a higher interest rate.

Secondly I would suppose the rich would get around the higher costs with two smaller loans anyways.

Probably in there somewhere the gov't is losing out on revenue in the securitazion process of jumbo loans.

But this is all roughly speaking, personally I don't think this is a subsidy.
 
This has nothing to do with rich people. They're trying to stimulate the demand for housing. There's also a proposal to give visas to foreigners who buy homes (I think the minimum cash investment is $500k) in the US.

The housing market is a huge drag on the economy. Congress is trying to stimulate the demand, driving up prices and, hopefully, turning upside-down morgtages into rightside-up mortgages. If that happened, everyone who owns a home would benefit. Most of the benefit would go to the middle class since they own most number of homes in this country.

I doubt they can create enough demand for it to work, but at this point they have to try something.
 
Quote from tomdavis:

"...The housing market is a huge drag on the economy. Congress is trying to stimulate the demand, driving up prices and, hopefully, turning upside-down morgtages into rightside-up mortgages. If that happened, everyone who owns a home, especially the middle class since they own the most number of homes, would benefit.

I doubt they can create enough demand for it to work, but at this point they have to try something.
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As usual, Congress and the Administration are missing the boat. Before there can be solid housing demand, there needs to be strong job growth and at decent wages. Until The Powers figure that one out*, housing is going nowhere.

*Ahhh, but they don't need to "figure it out"... Cain has already done it for them with his "9-9-9" plan.. so or something akin. But... will Congress and the Administration (ANY administration) adopt such a plan and soon? Doubt it.
 
I agree. Without job growth the housing market is DOA. In Southern California where I live, housing prices are predicted to continue to drop because U6 unemployment is over 20% and businesses/jobs continue to leave the state at a record pace.

http://thebusinessrelocationcoach.blogspot.com/

Some economists are predicting that housing prices in California will fall all the way back to 1997 prices from their peak in 2007.

Quote from Scataphagos:

As usual, Congress and the Administration are missing the boat. Before there can be solid housing demand, there needs to be strong job growth and at decent wages. Until The Powers figure that one out, housing is going nowhere.
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I wonder how mortgage underwriters rate risk on a W-2 in this environment. What occupations are risk free of lay offs? Self employed, probably never get a loan.
 
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