Obama slashes mortgage insurance premiums for subprime borrowers

With just ten days to go, Obama adds a little time bomb into the housing market. It’s as if we have learned nothing about the housing bubble and subprime borrowers. In case anyone may have forgotten what this election was about and why we may have dodged a bullet, I give you this story.

subprimeWhat do you do when a quick rise in mortgage rates suddenly threatens to tame home buying demand from subprime borrowers who, despite the lessons from the past, are still purchasing homes, en masse, with only 3.5% down payments and just enough monthly cash flow to cover mortgage payments?  Well, if you’re the Obama administration then you simply socialize the problem and force those higher mortgage costs on taxpayers.  Anything less would just be a hateful attempt to deny minority and low-income citizens their “right” to home ownership.

And while the Obama administration isn’t directly passing out tax dollars to subprime borrowers to make their monthly mortgage payments, its recent decision to lower the FHA’s annual mortgage insurance premiums by 0.25% is essentially the same thing since tax payers are still on the hook for the same risk but receiving lower premiums in return.  Per Bloomberg:

The FHA doesn’t make mortgages. It sells insurance, paid by borrowers, on loans protecting investors in case of default. The program allows borrowers to get a mortgage with a down payment of as little as 3.5 percent and a credit score of as low as 580, on a scale of 300 to 850. That makes it one of the most forgiving mortgage programs and popular among first-time home buyers.

Some in the real-estate industry have been calling for another fee cut and heralded Monday’s move.

“Dropping mortgage insurance premiums today will mean a whole lot more responsible borrowers are suddenly eligible to purchase a home through FHA,” William Brown, president of the National Association of Realtors, said in a statement.

The FHA last cut premiums two years ago. That cut, which came as rates dropped and lowered the annual fee for most borrowers to 0.85 percent from 1.35 percent, led to a wave of refinances.

More at Zero Hedge

Reject USDA School lunch program? Punishment follows

You know the drill by now. Schools are abandoning the Michelle Obama’s school lunch programs due to the uneatability and loss of revenue. If you thought just giving back the subsidies would be the end of the story, think again. No, the jackboots come. The USDA promises a “Cascade of Regulations.”  It is the Chicago way.

In the words of board vice chairman John Laferriere:

“Essentially, we want to get off the federal teat. At the end of the day, that’s what it is. And we’re getting penalized for it.”

What did they think Michelle Obama et al. were going to do, give them a gold star for resisting?

Today’s lesson at Londonderry High: The purpose of Big Government is to become Bigger Government. Those who succumb are absorbed. Those who resist are squashed. H/T:Moonbattery

michelle-obama-great-mother

School officials last year decided to remove Londonderry High School from the National School Lunch Program after nutrition regulations championed by first lady Michelle Obama resulted in a significant drop in cafeteria sales, and a significant increase in food waste, the New Hampshire Union Leader reports.

The move meant the high school forfeited federal subsidies that come with the program, but officials increased lunch prices and introduced new offerings students love to make up the difference, and then some.

The high school’s successful transition, however, apparently doesn’t sit well with federal bureaucrats at the U.S. Department of Education, who apparently issued a threat to district officials recently in hopes of changing their minds.

The USDA’s national office told school officials they must provide an “accountability and reconciliation plan” to document production and waste in the high school’s kitchen and comply with “more than monthly” inspections to continue its arrangement“ Dining services director Amanda Venezia said Monday she was told in a conference call last week that the U.S. Department of Agriculture may not treat the school as a processing facility,” the Union Leader reports. “The categorization would impose substantial regulatory and financial burdens, she said, require at least one new hire and lots of paperwork.”

More at EAG News

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