FreedomWorks, American Conservative Union, Americans for Tax Reform , Citizens Against Government Waste, Club for Growth, Competitive Enterprise Institute, and the National Taxpayers Union have come together to urge the Senate to say NO to the Housing Economic Recovery Act, commonly known as the Dodd-Countrywide bailout bill.
Here’s an excerpt from their letter:
“The Dodd plan creates a new housing trust fund that will collect more than $530 million a year through a new levy on Fannie Mae and Freddie Mac. The trust fund in turn makes these funds available to politically active community groups like ACORN outside the normal appropriations oversight.
“In addition, the Dodd plan creates a new $300 billion facility that allows mortgage lenders to cherry-pick their worst performing loans and roll them into the FHA, shifting 100 percent of the loan liability to the taxpayer.”
The THREE HUNDRED BILLION DOLLAR BAILOUT went to the Senate Floor today and advanced in the Senate with overwhelming support.
I’m thrilled that they are shouting we don’t need more taxes so that Countrywide and others are empowered to keep doing business as usual . . . (I say Countrywide because from all appearances Countrywide will be one of the prime beneficiaries of this bill due to the overwhelming business it did in the sub prime market.)
The Housing Economic Recovery Act, if passed, will, after adding $300 billion to the taxpayer’s burden, probably send those banks’ worst loans to the FHA, which, you guessed it, will create another FIVE HUNDRED MILLION DOLLARS IN TAXES ON GSE’s. (GSE’s are Federal Home Loan Banks, Freddie Mac, Fannie Mae, Ginnie Mae, Federal Farm Credit Banks, Federal Agricultural Mortgage Corporation.)
These same issues are supported by findings released earlier this week by the Congressional Budget Office’s (CBO) scoring of legislation.
“Mortgage holders would have an incentive to direct their highest-risk loans to the program,” the agency noted.
But the Congressional Budget Office thinks the FHA plan might only have a modest impact.
Despite up to $300 billion in loan guarantees, CBO’s analysis of the Senate bill projects demand for only $68 billion through 2011.
“CBO estimates that approximately 400,000 loans would be guaranteed under this legislation with an average loan amount of $170,000 each. Thus, CBO estimates that FHA would require about $68 billion in loan commitment authority through 2011 to implement the program. “(The legislation would authorize FHA to provide up to $300 billion in loan guarantees under the new program)
AND “…35 percent of the loans refinanced through the program will eventually default anyway.”
CBO estimates that enacting this legislation would increase revenues by about $8.0 billion over the 2009-2018 period, net of income and payroll tax offsets. Over that period, we estimate that direct spending from those proceeds would total about $7.2 billion. The additional revenues would thus exceed direct spending by an estimated $800 million.” Read the full text of the CBOs findings
So they’ve figured out how to arrive at a surplus in the budget, rather than a deficit by creating this whole new way of life for originators, lenders, sellers, servicers . . . How about we just SPEND LESS MONEY?? Isn’t that what you do when you don’t have it? You spend less.
Where do revenues come from for the federal government? Regardless of who writes that last check, ultimately, revenues come from taxpayers . . .
These bills are NOT going to improve the quality of life for most people . . . they will help lenders, who knew they had a parachute when they made these risky loans (REMEMBER THE S&L BAILOUT – they were bailed out with tax dollars).
And it will help people who probably shouldn’t have gotten a loan in the first place and may not pay it back even after this second chance.
Write your representatives.
Stand Up and Be Heard, or you’re going to be paying for it for the rest of your life.
And, sadly, so will your kids.