
President Obama made a speech on housing yesterday full of great rhetoric about doing the right thing. Not detailed in his speech were a number of specific proposals the Administration hopes Congress will enact. One of these proposals in the list would allow banks to dump their bad loans on the US taxpayer through an expanded HARP-like program: Expand eligibility for refinancing to many hundreds of thousands of eligible borrowers who do not have government-backed mortgages by creating special programs through the Federal Housing Administration (FHA) or Fannie Mae and Freddie Mac. If you take a non-government-backed loan and refinance it through the FHA, it becomes a government-backed loan. The liability for future losses -- and there will be future…[READ MORE]