Obama Housing Plan To Promote Theft?

New buzzword to listen for (and remember i told you): Obstructionist. See below.

Rumors are circulating around the talk radio shows that BO's plan to fix the housing mess in the USA is going to include a provision for lowering principal balances on loans. It is clear that Barry O' thinks this is A Good Thing to Do (and we must Do Something!)

Hold on there.

Let me be quite clear about this:

A cram-down that forces the bank to accept a lower principal balance IS THEFT of principal from the lender.

How? They loaned you $100k for your house. You are now obliged to pay only $70k for your house. They will never recover those $30k. They have been robbed to the tune of $30k. Why would anyone make a mortgage loan in an environment where this can happen?

Well, sure they will. For people with excellent credit, who are willing to pay higher interest rates. This will cause an escalation of the same credit standards-tightening that is being decried as "not lending enough" and "too hard to get a loan" already. Just wait for the howling to begin when banks' actuaries figure out they need to charge 9% on a 1 year ARM and 8% on a 30 year fixed note.

If you don't see this as a logical result of President Obama's plan, you are mentally deficient. Sorry, but you are. He is. Dr. Savage calls this particular mental disorder "Liberalism."

The only good thing I can see coming from this morally corrupt action by the President is higher taxes coming in to the treasury. Wait, what?

Because you have been given $30k in equity in your house, the IRS considers this the same thing as being handed $30k from your boss for a job well done. You will be taxed on it. That puts you from a net gain at tax time to paying several thousand dollars to the IRS, and disqualification for the "earned income tax credit" as well as additional child tax credits. You people who screw your banks out of principal will be screwed by the IRS AND YOU DESERVE EVERY BIT OF IT. You don't care about dishonor? I hope you get to care about paying taxes (like the evil rich people do) for a change.

There are two things that could modify the above, and both of them mean you (the taxpayer, not the @sshole screwing your bank) take even more of a bath.

a) tax liability for the "income" from gaining equity in your house could be waived, depriving the .gov of a pretty fat source of income from you that year (theft without consequences)
or
b) Uncle Sugar picks up the tab and pays your lender the difference in what the bank is going to get from you and what you signed a contract agreeing to pay them. This is a potentially huge drain on the national coffers but it wouldn't surprise me to see the Communists @ the Dept. o' the Treasury go for it. After all, it's our money, see, not your money.

If you don't think so, you are bad.

If your Elected Heroes stand in the way of this evil action and the attendant assaults on the rights of Contract and Property, they are to be labelled OBSTRUCTIONIST and against the poor poor pitiful poor people. SCREW. We need some partisan politics when the alternative is stealing peoples' money to pay other people for doing dishonorable things to counterparties who acted in good faith.

Why should the bank take a bath? Because they signed a contract? You signed the same contract you jerk and I think YOU should take a bath.

I am beginning to understand why there used to be such a thing as Debtor's Prisons. Because this is just as evil as murder. Hit me up in comments if you want to know how so.