Who Said This

- 'For those Americans in danger of losing their homes, today I'm also proposing a three-month moratorium on foreclosures. If you are a bank or lender that is getting money from the rescue plan that passed Congress, and your customers are making a good-faith effort to make their mortgage payments and re-negotiate their mortgages, you will not be able to foreclose on their home for three months.'

- 'I propose that we allow every family to withdraw up to 15% from their IRA or 401(k) - up to a maximum of $10,000 - without any fine or penalty throughout 2009.

You will hear these words later when you are watching the debate. Don't be fooled - think for yourself. More than 500,000 homes are currently in danger of foreclosure. Never a higher number in our nation's history! What many fail to realize is why so many homes are currently in foreclosure danger. Sub-prime loans, ARMs and sub-prime ARMs. Simply put, lending institutions lowered their underwriting criteria to allow would be home owners (that were not previously eligible) to purchase homes. This was done with little or no proof of income and in many cases under the terms of interests rates that started lower (if not zero percent) and increased over time. The new home owners were barely able to afford (and many not able to at all afford) their mortgages. As the rates increased, the defaults fell into effect. Since the failed loans were opened in a short period of time, they failed in a short period of time. As money gets infused from the bail out, interests rates will lower. (Being the type of person that I am I called my bank and asked for a lower interest rate this morning knowing this was going on. You will amazed at what I was told. I was told flat out that my credit was too good! She further went on to explain that because I have never missed or been late on a payment I was not eligible for a lower interest rate. Appalled, I push it and ask her if I miss a few payments if I would then be eligible. The answer was yes! Punished because I bought my house the correct way and put money down, opted for a shorter mortgage term that best meets my needs and maintain good credit. - What happened to the 'good faith effort'? Somewhere this fails to make sense to me).

The vast majority of these homes will foreclose regardless of a 90 day moratorium. The underwriting criteria will become more strict and sub-prime loans will become a beast of the past. A logical questionis what will the morartorium actually do? The 90 'freeze' will allow for the full implementaion of more guided mortgage underwriting criteria - those in need of refinancing (some 78% of the 500,000 forclosure risks) will be held to the new standards, not the old. Sub-prime lending being defunct will mean they will inevitably foreclose; just in less hostile political climate after voter ballots have been casted. But this is what people want to hear so this is what they will be told. (They will blindly listen and follow because that is what weak minded people do). If a politician truly wants to help them; drop their interest rates to zero for 12 months and reintroduce them at the initial interest rate less .5%. Forgive 90 days of mortgage payments while applying the full year tax credit (for those eligible) - by putting a piece of the bail out money exactly where it is most needed; vice encouraging Americans to withdraw on their retirements!

The concept of that is insane. Encouraging the pulling of investment backed assets under current market conditions is bad. You are pulling dollars at lower value and replacing them when it will be more expensive to do so as the market index increases while the economy recovers. Basically you are selling stock at a low price to return and reinvest when the stocks will be at a very (easily predicable) higher price. (If they will be reinvested at all - we all know how these things work). A withdrawal of 10K today has an average maturity value of $42,415 if you base it's performance on the index of the last forty year by factoring in averages of 7% interest, 3.1% inflation and 15% in tax rate (which one candidate is trying to lower to 7% - should this happen that same 10K now totals $48,390). He is suggesting Americans give away $32,415 in matured long term investments in order to stimulate the economy by 'common' means. The idea is actually that we allow the removal of pieces of retirement with the incentive that these dollars will not be taxed upon withdrawal. He is literally asking Americans to walk away from over 32K when they retire so they can surge the economy for him today! Don't be a fool. This is a farce, those who are actually smart enough to prove how things actually work behind what is being said will see the obvious flaws. The reality is that we determine what we want to hear and assume we like who it is coming from and decide it is good for us. Is encouraging you to spend 10K of your retirement dollars today (without taxing it) and not telling you that you are giving up over 32K actually good for you? A presidential candidate can say he has our best interests in mind by allowing us to throw away our retirement dollars to fix something he can't. A retirement account is designed with the intent of supporting a fixed income. That 32K will be much more needed then than it is today!

So, who said this?

Barack Obama.

He said it because he figured that the average Democratic Voter will not be able to figure it out. Personally, I am offended at such a blatant attempt, but I am guessing many had (and will have) no idea because by far and large he is right isn't he?

Before you Obama supports circle your wagons on me and get all pissed off read my BLOG; My Candidate Myself. I am not trying to change your mind, I am simply pointing out what he actually represents. If you are going to vote his way, understand what you are getting - fully. So many are putting so much faith into so little.