“The Obama administration today announced a new effort to help battered state and local housing agencies provide mortgage help to hundreds of thousands of homeowners,” ABC News reports. “The administration said the new plan will help keep mortgage rates low, and increase resources for low and middle income borrowers to buy or rent homes.” ABC then gives the details: “The administration’s new two-pronged initiative, operating under a law passed by Congress last year, will consist of a bond purchase program to support new lending by these agencies, and a temporary credit and liquidity program to boost agency access to credit sources for their existing bonds. The eventual size of the program will be set according to agency demand, but it does have a ceiling.” Federal spending with a ceiling? Couldn’t happen.
That’s not the real knee-slapper, though. Michael Barr, Treasury Department Assistant Secretary for Financial Institutions, provided the punch line, saying, “There will be strong taxpayer protections,” and the “expected cost to the federal government is zero.” We’re glad to know they can have their cake and eat it too.
In other mortgage news, the IRS is investigating more than 100,000 dubious claims of an $8,000 tax credit intended for first-time homebuyers. The credit was part of the so-called “stimulus” passed in February. We’re shocked — shocked — to hear that people might be gaming the system.