The Bush plan: our take

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Good morning. Our coverage of the Bush foreclosure prevention plan was rushed, and unsually even-handed, given our tendency to take cheap shots disguised as analysis. Commenter Dan Moran wrote, ‘Peter -- I notice you managed to post this without taking any shots at Bush as an individual. Try it with the Dems, just for a change of pace, eh?’

Thanks, Dan. Your point is duly noted. Out of fairness, we’re going to take a few shots at the president and his plan. First the president, and this comment at the White House yesterday: ‘See, it’s easy for me to stand up here and talk about refinancing -- some people don’t even know what I’m talking about.’

The president loves this kind of faux folksiness, and we find it arrogant, condescending and thoroughly out of touch. The whole point of the crisis we are in is that Americans DO know what he’s talking about. America’s consumers are addicted to cheap credit, are leveraged up to their ears, and know more about refinancing than the president could learn in a weekend of tutorials at Camp David. The guy has been living in public housing for 6 1/2 years while Americans have been swapping tips about how to turn their houses into ATMs that spit out vacations and new SUVs, and he stands there and says people ‘don’t even know what I’m talking about.’ When the president talks like this -- and he does often -- he underestimates the American people.

While we’re at it, the president’s proposal strikes us as modest -- it probably won’t do much harm -- but also vague and half-hearted.

Modest: Offering refinancing opportunities to 80,000 homeowners through the FHA. Our favorite mortgage broker/mortgage pundit, Lou Barnes, predicts this will not be an attractive option for most stuck borrowers: ‘no-equity households will defy workout by this new FHA effort, or any other.’

Vague: The president says he will not bail out speculators but supports tax breaks for those whose mortgages are forgiven after short-sales. So, do the speculators and flippers -- who made money on the first three flips but got stuck on the fourth -- get a tax break or not?

Half-hearted: The White House says it supports ‘state-based efforts to create a comprehensive mortgage broker registration system.’ This is classic Washington double-speak. What the president meant to say is that he opposes federal regulation of mortgage brokers. Similarly, the president’s statement on prosecuting fraud -- that the Justice Department is already on the case -- is perfunctory and indicates a lack of prosecutorial zeal. When the White House is serious about investigating a crime, it makes someone from the Justice Department stand up behind a podium in front of the press and put their name and professional reputation -- and career ambitions -- behind the investigation (See: ‘Enron Task Force’). Who is in charge of rooting out mortgage fraud? Everybody. Everybody, and nobody.

That’s our bloviation for the day and week. Now we’d like to hear yours.
Photo Credit: www.whitehouse.gov.