U.S. Government Paying Homeowners to 'Walk Away'

Three months after the Obama regime came up with its plan to “rescue” the U.S. housing market, it is doing more to get people out of their homes than to keep them in them.

The much-hyped “mortgage rescue” initiative has postponed foreclosure for only 55,000 U.S. homeowners. It would have to double that number just to qualify as “pathetic”. Additionally, with previous “mortgage rescues”, the vast majority of those “rescued” still lose their homes in less than a year. There is nothing about the current “rescue” which suggests this trend will change.

Meanwhile, with much less hype, the U.S. government has been quietly slipping “distressed” homeowners a cheque for $1000 – just to get them to leave their homes quickly and without vandalizing the properties they once owned (see “Treasury Dept. is giving cash for keys”). The goal here: to make foreclosures less costly and time-consuming for the banksters.

As I have stated repeatedly, the only conclusion to draw from the actions of the first Bush regime, and now the Obama regime is that they have no interest in helping U.S. homeowners. Rather, all indications are that they want as many Americans as possible to lose their homes – allowing title for all these properties to fall into the greedy hands of the banskters.

For those who consider such a suggestion ludicrous, simply read a previous commentary (“The Bankers Manifesto”) - and then let's see if you can still “laugh off” this assertion.

Meanwhile, the U.S. propaganda machine continues with its absurd claims that the U.S. housing market is “stabilizing”. The U.S. government knows this claim is 100% false. Even during a four-month foreclosure moratorium, which covered most of the U.S. market, foreclosures have continued to rise. And with the moratorium now over, another wave of foreclosures is just beginning to flood the market.

However, the data is clear that the worst of the U.S. housing crash has not yet begun (see “U.S. mortgage-crisis to get MUCH worse in 2010-11”). The largest block of mortgage-resets (where the default rates are higher) does not begin until next year.

What kind of liars would write that this market is stabilizing, when all the data clearly refute such a suggestion? What kind of idiots could believe such totally transparent lies?

With the Obama regime “greasing the wheels” of the banksters' foreclosure-machine, these lies will soon no longer deceive even the most-gullible of the sheep. However, as the banksters assert in their “Manifesto”, “people without homes will not quarrel with their leaders”.

The U.S. government has no interest in helping Americans. It serves the interests of the U.S. financial crime syndicate – exclusively. With its actions, it seeks to impoverish Americans, and throw them out of their homes and into the streets. And should these homeless protest, there will soon be plenty of “accommodations for them – in the private prisons springing up all over the U.S. By remarkable coincidence, both Dick Cheney and Alberto Gonzales have picked private prisons as their favorite investments (see “U.S. judges caught locking-up innocent children”).

And why not? With virtually no standards, and no oversight, it's very easy to keep costs down in warehousing these human cattle – while making profits on the stipend the government pays for each resident.

Better still, these prison populations are a great form of slave-labour – again, with no standards for treatment, and no oversight. The infamous “chain gangs” of the U.S. are back, with a vengeance, in the 21st century.

And all these “good things” begin by throwing Americans out of their homes.

Comments

[2houndz:]

Is there supposed to be some point to this rant?

May 18 07:56 AM

[bluesmoke:]

"Banksters" I like it!

May 18 09:31 AM

[rm:]

The economic value of staying longer usually exceeds the amount of the check offered.

The average American may not be able to calculate the risk of an ARM re-set that can't be refinanced, but they do know how to tell if a few month's rent is greater than the bribe to move out early.

May 18 09:45 AM

[ThePhoenix:]

I think the message of this article is accurate but delivered a tad harshly. Sounds a little like a "conspiracy theory". However, I agree with the underlying data and conclusion. No question, mainstream media and the government are spinning wildly the positive elements. Fortunately many of the consumers have not beleived the spin for a while now and are giving the keys away in droves. I do disagree that the ownership of all of these properties by banks will be beneficial to them... its a stupid investment at this point and they will lose much more than they will ever gain.

May 18 10:17 AM

[Jeff Nielson:]

Hi Phoenix. I'm not hinting at a conspiracy, I'm "shouting it from the rooftops". Again, I would encourage you (and others) to read "The Bankers Manifesto...".

The U.S. government has made a conscious decision that instead of bailing out the U.S. housing market directly, it will ONLY bail out the banksters 30:1 leveraged-bets on the housing market.

As a matter of simple arithmetic, this is INSANE - unless the goal is to ONLY bail out the bankers, while letting everyone else "go under".

May 18 10:30 AM

[mr_subprime:]

Phoenix, you forgot something. They were paid when they sold the note forward, plus the fees and commissions. They were paid AGAIN by the Credit Default Swap insurer when the loan defaulted, and then they got paid A THIRD TIME with the TARP money. Conspiracy? You betcha! When you structure a trust with 1000 prime loans overlying 3200 subprime loans, of which 40% resulted in default, bankruptcy, foreclosed, and "RealEstateOwned", all only 2 1/2 years into the life cycle of the 30-year MBS structure, THIS WAS NO ACCIDENT!!! This is indeed a conspiracy to grab as much of this country's real estate and force as many citizens into bankruptcy and submission as they can. It started with Clinton (Gramm, Leach, Bliley Act) but the whole of Congress is enslaved to the American Bankers Association and the Mortgage Bankers Association. If you can make everyone poor and homeless, they become dependent on the government for EVERYTHING!! That's the plan! Remember it! And you homeowners out there? START FIGHTING BACK!!!

May 18 10:45 AM

[mr_subprime:]

And thanks, Jeff Nielson, for shedding a little "light of truth" on the situation!

May 18 10:47 AM

[5142152-337:]

"Truth" is Jeff's middle name!

May 18 11:42 AM

[TommyG:]

Total Crap and not of the caliber I expect on this website.

May 18 02:34 PM

[TheReaper!:]

As far as home foreclosures go , you ain't seen nothin yet . This is not going to end any time soon , this I assure you . The boomers are just now starting to retire , and many of them are losing their jobs at the same time . Their homes are worth less than they paid for them , their retirement nest eggs have been cut in half , and many of them own McMansions that the next generation could never afford to buy .

So what will happen when they want to move on or are forced to ? They the 77 million boomers , will walk away from all those McMansions . This dear reader is the next really big problem for the banksters .

This is what we have to look forward to for the next say ..20 years ?

TheReaper!

May 18 03:15 PM

[notsosmart:]

you can put it harshly or very diplomatically.its not a conspiracy but always has been a ponzi/casino by the name of wallst. as long as the dumb sheeples were not fleeced too much,made a few $ here & there,bragged about their 401k(now 201k) plans all was ok.now that the crooks & scoundrels have cashed in & buried their legacy fortunes in overseas tax free accts,6.5 mil.jobs lost(app.10% will never come back) folks complain & are called conspiritor mongerers.no conspiricy here.just out & out "legal" theft.so you can call it anything you want.its not over by a long shot.it wont be over till the middle class is fleeced bald.

May 18 04:39 PM

[O-B-WON:]

I fear that “it's” already too late...

Most people I know casually are apathetic and are just drifting along taking the easier path of resistance…. They just don’t care.

Having grown up on a farm, I see a parallel between feeder pigs being fattened for the slaughter and the average American. They’re only interested in sex and the next meal till it’s too late when they feel the holding chute clamping down on their neck for the “coup-de-gra”.

We’ve had “it” too good for too long. Most sheeple wont admit that there might be “BLACK SWANS” getting ready to bite us in the ass and they don’t even know they are “sheeple” being led to the slaughter.

The residents of the United States of America (and I use the term loosely) have misplaced their moral compass and don’t even know where “TRUE NORTH” is, or even that there is a true north.

Enjoy the present… Hope for the best… Plan for the worst…

May 18 09:37 PM

[ThePhoenix:]

Wow... well ok... like I said, I don't disagree with the conclusions. I am the first to admit when I hear the government tell us how things are improving I say b*llsh*t. However, I always worry that when a good message gets couched in a conspiracy theory, folks have a tendency to ignore it. I prefer more beneficial methods of persuasian to keep the interest in the message.

May 18 11:08 PM

[curious cat:]

you think the idiots in charge have the brains to pull off a conspiracy? that's a laugh. i love to read facts and pattern analysis which lead an investor to place a sound bet, but spare me the motivation speeches. in a capitalistic society, the motivation is money, (greed and fear). you should have gathered that going in.

bankers were able to place huge bets, with no risk. the bankers on the losing end of those bets, because indeed there were many, have convinced congress that the system collapses if they don't get baled out. what congress should have done was claw back money from all the bankers who took no risk, then they should have created new banks with no toxic assets. the bankers on the wrong side of the bets should have been allowed to fail. all investments in those banks go to zero, period.

the fact that our congress is full of mental midgets, that fail to comprehend how our system actually works or should work, does not amount to them being puppets for the bankers. morons, yes, conspirators, no.

May 19 01:05 AM

[Dead End:]

I just don't get this article.

The fact of the matter is that people have stepped in you know what, and nobody wants to face the music. As I have repeatedly said, the shortest way out of this mess is to let the mechanisisms of our economy do what they do naturally. We have spent 20+ years under presidents republican and democrat alike tweeking the economy and at this point, they are out of tweeks.

The people who took the short cut are going to have to pay the price and lose their homes. The banks that can't find a way to stay solvent are going to have to be taken over by better capitalized banks or flat out go under.

Its time to take our medicine and the longer we put that off, the more bitter of a pill it becomes.

May 19 06:26 AM

[pfw:]

The Bankers Manifesto of 1892? Can anyone actually substantiate this? When I tried to find a reputable source validating its authenticity, all I got were a bunch of random blogs, forums and conspiracy sites. I can't even find any proof that Lindbergh ever said anything about it ever.

This would be a great article if it weren't for the wild-eyed and nonsensical theme of bankers kicking people out of their houses in order to generate slave labor. The only reason a house has any monetary value is that someone will buy it; if you lock up your consumer class then your devious foreclosure plan fails hard as house prices drop back to 1930s levels and your balance sheet goes so red it bleeds on the floor. Meanwhile, your massive prison slave population won't be producing anything of value that can't be produced cheaper (no slave masters to pay or prisons to maintain) in China or some other emerging economy, making you completely uncompetitive. And as you sit laughing maniacally on your pile of worthless paper denominated in a currency which you have just devalued to the point of worthlessness, some dude in China will buy you out for a fraction of a penny on the dollar and wonder what the hell was wrong with those idiot Americans.

May 19 07:18 AM

[bendra:]

I think this is legitimate. It makes more sense to give distressed homedebtors some money to help with moving costs and help them get into rental situations that they can afford than trying to prop their mortgages up. Its much cheaper and more humane as well.
No one is being made homeless by this; people leaving their underwater homes will be able to afford to rent; probably they will be able to afford to rent a better place then they left at a lower monthly cost. Helping someone doesn't mean having the government buy them a house.
Prices need to fall a lot more to make houses affordable at least where I live (SF Bay Area) using traditional measurements of affordability such as 3x average income. It is counterproductive to try to stop this, but as compassionate persons we can do some small things to soften the blow to those who got caught up in the bubble and bought more than they could afford.

May 19 10:45 AM

[lyingtoours...:]

Refinanced the other day to save some bucks and they asked me if I wanted to cash out. Also, I pay 1.5x on the front end of my loans, usually until I'm up until about payment 100, then maybe back off. Essentially, by not promoting building equity, and asking people to cash out, the banks are insuring steeper interest payments for themselves which takes away from disposable income, which essentially crashes are consumer dependent society / economic model.

For one second I actually considered asking how much I could cash out for, burying the money, stop making payments, keep saving, wait until I get kicked out, quit my really stupid government job, and just go do something different for a change.

May 19 01:07 PM

[JonesesRInF...:]

I agree that the market is not stabilizing. I am a former commerical realtor who follows the market now..in the residential side I am seeing foreclosed homes that once sold for almost 2 million reduced to 700K and yet NO BUYERS!!!...Does that show a stable market? No. What it shows is that America's ability and appetite for "over the top" or "keeping up with the Joneses" is now GONE!!
The reality is 1)we built more homes than people needed. 2)the banks don't give a damn about helping homeowners. Check out Bank of New York. They are buying up the severly distressed mortgages across the country like candy. So Mr. Homeowner may have a 300K note with his orginal lender and be underwater by 50K..but the new owner of the note BoNY bought the note for 100K..meaning they have equity! Why should they help Mr. Homeowner? They won't. 3)Communities are changing. Example the Country Club Community near me is seeing the "joneses wannabees" move out and the people with REAL MONEY moving in. Subdivisions are going to revert back to where they are filled with homeowners who can really afford the homes. The "real" rich will live together, the middle class, and the poor. No more trying to sneak in to a place you don't belong.

May 31 05:58 PM

[JoeSixPack:]

Not only were they paid by the CDS, but since the govt. held up AIG and other "insurers", they have less or no incentive to try and renegotiate the loan. Had AIG, a total sham, been permitted to fail, the banks would have lost their CDS "protection", and thus had more incentive to work with the homeowner. OUR MONEY IS BEING USED TO SWAY THE BANKS AWAY FROM HELPING US. Thanks, Mr. Obama/Bush, you jerk(s).


On May 18 10:45 AM mr_subprime wrote:

> Phoenix, you forgot something. They were paid when they sold the
> note forward, plus the fees and commissions. They were paid AGAIN
> by the Credit Default Swap insurer when the loan defaulted, and then
> they got paid A THIRD TIME with the TARP money. Conspiracy? You betcha!
> When you structure a trust with 1000 prime loans overlying 3200 subprime
> loans, of which 40% resulted in default, bankruptcy, foreclosed,
> and "RealEstateOwned", all only 2 1/2 years into the life cycle of
> the 30-year MBS structure, THIS WAS NO ACCIDENT!!! This is indeed
> a conspiracy to grab as much of this country's real estate and force
> as many citizens into bankruptcy and submission as they can. It started
> with Clinton (Gramm, Leach, Bliley Act) but the whole of Congress
> is enslaved to the American Bankers Association and the Mortgage
> Bankers Association. If you can make everyone poor and homeless,
> they become dependent on the government for EVERYTHING!! That's the
> plan! Remember it! And you homeowners out there? START FIGHTING BACK!!!

Jun 09 05:27 PM