CNN's Blitzer, on-screen text misled on cost of housing bill
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SUMMARY: CNN's Wolf Blitzer made the misleading assertion that "the House of Representatives just passed a $300 billion plan to help struggling homeowners." In fact, while the bill to which Blitzer referred would authorize the FHA to insure up to $300 billion in homeownership retention loans for qualified homeowners, the Congressional Budget Office estimated a total cost of $2.7 billion for the program.
During the May 8 edition of CNN's The Situation Room, host Wolf Blitzer made the misleading assertion that "the House of Representatives just passed a $300 billion plan to help struggling homeowners." In fact, as Media Matters for America documented, while the FHA Housing Stabilization and Homeownership Retention Act -- which passed the House as an amendment to the American Housing Rescue and Foreclosure Prevention Act -- would authorize the Federal Housing Administration to insure up to $300 billion in homeownership retention loans for qualified homeowners, the Congressional Budget Office estimated that loans that would be insured under the program would total about $85 billion, at an estimated cost to the government of $1.7 billion from 2008-2013. Including administrative and other discretionary costs, the CBO estimated a total cost of $2.7 billion for the program, not "$300 billion."
While Blitzer spoke, on-screen text stated, "House approves $300 billion bill to help struggling homeowners."
After noting that "[m]any Republicans oppose the bill," Blitzer reported, "President Bush is threatening a veto, saying these Democratic efforts would help lenders and speculators, not homeowners." Blitzer did not note that the assertion he attributed to Bush -- that the bill would not help homeowners, but rather speculators and lenders -- is false. In fact, the bill specifically limits access to retention loans to owner-occupied homes. During debate on the issue, Rep. Melvin Watt (D-NC) stated, "The bill explicitly says that this is limited to homeowners, not people who have been speculators. I don't know what else we could say on that. The language is absolutely explicit that only homeowners qualify for this program." Similarly, according to a May 9 Washington Post article, Rep. Steve LaTourette (R-OH) said, "They say it rewards speculators. No, it doesn't. It's limited to homeowners. They say it's a $300 billion bailout. No, it's not. It costs $1.7 billion."
From the May 8 edition of CNN's The Situation Room:
BLITZER: In today's "Political Ticker," moments ago the House of Representatives passed a $300 billion plan to help struggling homeowners. It would allow them to refinance their loans into more affordable fixed-rate loans backed by the federal government. Some experts say it could help 500,000 homeowners. Many Republicans oppose the bill. President Bush is threatening a veto, saying these Democratic efforts would help lenders and speculators, not homeowners.
Why is MMFA pushing this?....we are on the hook for $300 billion, that is a fact. Whether it ultimately costs that much is irrelevant, it is the guarantee. This is not misinformation.
We know some liberals really never like to let people know what they actually believe, or what their position is, but this is ridiculous.
Tommy
My bet is MMFA is pushing this becuase they know Bush will veto it and say it is too costly. I have no issue with the bill and I do think it will cost 300 Billion or more, the housing market is a mess. To say its 2.7 Billion would be misinformation.
Since when has anything that has been given a "range" by the government, more specifically liberals, ever been on the low side of the cost range factor?
I dont ever recall seeing a total put in place for an entire war from start to finish.
But how about Pelosi's plan to reduce oil from its high of $70 a barrel in April of 06? The "Common Sense Plan" really made "common sense", didnt it?
"I dont ever recall seeing a total put in place for an entire war from start to finish." - Columbus1492
Well, Columbus, you have to keep your eyes open when you look. How did you ever find America? From the link (it's visible in many other places as well, but this contains the reprint of the original article)...
"The administration's top budget official estimated today that the cost of a war with Iraq could be in the range of $50 billion to $60 billion, a figure that is well below earlier estimates from White House officials."
http://www.iraqfoundation.org/news/2003/ajan/2_whitehouse.html
"we are on the hook for $300 billion, that is a fact. Whether it ultimately costs that much is irrelevant, it is the guarantee. "
Nonsense. Using that logic, American insurance companies are 'on the hook' for TRILLIONS.
Student loan banks the same.
I don't hear any of them complaining.....
Also-- you default on your mortgage, Uncle Sam or its designee gets the house. Nice deal, nice guarantee.
I'll take that "risk."
"They say it rewards speculators. No, it doesn't. It's limited to homeowners. They say it's a $300 billion bailout. No, it's not. It costs $1.7 billion."
How's that for misinformation? It costs 1.7B? No, it will cost AS LITTLE as $1.7B.
It is NOT limited to homeowners. None of the money will go to homeowners, it will ALL go to lenders. It is in a sense a corporate bailout from risking to deal with lower home values on foreclosure auctions, and its a bailout for consumers who are too stupid to make wise financial choices. My god, what makes you think you are financially secure enough to own a home when your credit card company will not lower your 29.99% interest rate? Morons.
This is nothing more than an insult to renters looking to buy their first home by saving up the right way, with enough down payment to afford the monthly payments on a 30 yr fixed. This is also an insult to homeowners not in foreclosure who cutting back on fuel and other "wants" to pay their mortgage and put more in savings....but you libs think they should be liable not only for their own home payment, but also their neighbors.
Socialism at its finest.
It is indeed an insult to those who were financially prudent and didn't buy what they couldn't afford. And now the lenders are whining too. The market needs to fix itself, it will if the government doesn't step in to artificially repair it, and then we start all over again.
I bought a Rolls a few years back because the dealer gave me a great deal, and now I can't afford it - where is my bailout?
You may see it as an insult, but the purpose it to also help out those who were responsible. The extended effect of the mortgage fiasco is excessive reductions to almost all home values, with some regions hit much harder than others. The purpose of this plan, much like the Bear-Stearns thing, is to help protect the responsible from needless suffering caused by the irresponsible. An unfortunate consequence of the effort is that some receive a benefit they may not deserve. It becomes a question of greater benefit to the innocent and the economy.
I'm not necessarily in favor of the plan. I'm generally a little torn on it. I just don't like to see it portrayed as strictly a bailout for irresponsible people.
"On principle. Why should my neighbor get bailed out when I waited? It is inherently unfair."
Then you're a chump for waiting. Do you feel the same way about guaranteed student loans? Why not-- same thing.
Righties always like to call progarms they don't like a 'bailout.' But they have no problems with, say, their own parents bailing them out when need be, or bailing out their own kids. Or programs that 'bailout' businesses.
Some people don't have rich parents. So what's wrong with Uncle Sam helping out instead?
Nothing.
I'm curious about that Rolls...
How did you go from being able to afford the Rolls payment to not being able to afford the Rolls payment? Was your interest rate fixed? If not, was it subprime and adjustable?
What happened when your loan was underwritten? Did you give accurate information? What kind of actuary procedures were adhered to when assessing the risk of lending you money?
How many other Rolls owners are in your situation? Was this the result of a nationwide subprime Rolls-Royce lending frenzy? Did the number of Rolls-Royce repossessions suddenly jump 79% to over one million in one year because of loans like yours?
Actually, I was given a super low interest rate because the dealer wanted to unload it, he had a quota or something, and I was not told the interest rate might go up. I didn't thoroughly read the contract I signed, and I didn't wonder why I was buying a car that was nearly double my annual income?......it just all sounded so good, I bought into it, and I thought I would worry about it down the road. Sure, I could have bought a Mazda and been just fine, but I just wanted that damn Rolls, I looked so good in it.
But now, who cares? The government covered for me not doing my homework and throwing my finances to the wind, and now they will take over the payments........yippee, life is good.
Perhaps if they bought the Mazda, they should have bought a Kia, or a used car.
;)
Sure, I could have bought a Mazda and been just fine, but I just wanted that damn Rolls, I looked so good in it.
LOL
Hey Tommy, for a homeless man, sleeping in a Rolls is much more comfortable than the MazdaI bet. :-)
"Sure, I could have bought a Mazda and been just fine, but I just wanted that damn Rolls, I looked so good in it."
Somehow Tommy I think housing is a more valid subsidy than a Rolls. I think the comparison is ridiculous-- because, at the very least, no one is proposing helping out poor Rolls buyers.
Why not? People don't need to own a home in order to have an excellent quality of life, some do rent very nicely you know?
Idiot. That's like saying that none of your salary goes to you.... it all goes to people you buy things from or owe money to.
By that logic, why give tax cuts to rich people? The money doesn't go to them.... it goes to their brokers and yacht dealers.
Don't be silly, it all goes into business investments and job creation.
Gimme that supply-side religion
Gimme that supply-side religion
Gimme that supply-side religion
It's good enough for me
"it all goes into business investments and job creation."
In China, India, Korea, Malaysia, the Caymans, Dubai, and Mexico.
"This is nothing more than an insult to renters looking to buy their first home by saving up the right way, with enough down payment to afford the monthly payments on a 30 yr fixed.
That's an interesting point, but it's also a little antique. Few people save up $100,000 these days-- or can. In the old days, one working person could save up the $5,000 or so down to get a $28,000 house. Those days are long gone.
It's also life-- a lot of people who are prudent get passed by by those who are not. It's called America.
It's interesting that you conveniently left out the fact that there are/were thousands of unscrupulous lenders out there who convinced otherwise responsible people that they could afford a home which they couldn't. You may know that buying a home is not a simple process - and can at times be very confusing. Lenders and agents are partially to blame. Don't lay this mess squarely on the shoulders of those who are now losing their homes because of others who were so set on making a commission at the expense of those who couldn't truly afford a home.
There's got to be some truth in lending violations in there somewhere.
I am fully aware of the layers upon layers of possible confusion when it comes to buying a home. I also understand that if one is in a position to do that, comes the responsibility and all that entails.
It is not fair to those who thought, "nah, too good to be true, or as attractive as these incredibly low interest loans look, I'll think I will wait so there are no surprises when the mortgage triples in 3 years" .
What about those people? What about rewarding them with a more affordable, more realistic housing market to where it should be, based on market factors? Why do people who played by the rules and were financially prudent and smart get the shaft? Why them?
Reading comprehension as an index to mental derangement. Watch this space.
Shrub now sides with homeowners. Homeowners you now have a clear reason for fear.
Yow! I just looked at my medical insurance numbers. It looks like I'm going to have hundreds of thousands of dollars worth of physical problems this year, since that's what I'm insured for.
And I don't know how my auto insurance company stays in business if they've got thousands of cars insured, and have to pay the full value of each of them, along with the cost of all potential injuries and property damage every year.
Can I get in the Tommy and Columbus club now?
I agree. $300 billion isn't going to happen but neither is $2.7 billion in my opinion.
In this misinfo battle between MMFA and CNN I call it a draw.
Then why didn't the FHA insure the bill for $85 billion then, why go to $300 billion?
Pay your dues at our first meeting.
I understand that Social Darwinist Schadenfreude compels you to let all these "stupid people" drown in their own red ink.... but is that the best thing for the economy? Just asking.... maybe you can convince me that it is.
I dont think the liberals have ever heard the phrase "no investment is a sure thing".
And we are not in the business of cherry picking who we should get out of a financial mess, or at least we shouldn't be. To some, their home is everything, but to others their transportation is everything, and far more important than the difference between renting and owning a home.......if I make my living driving a truck I am paying for, and that truck gets repossessed because I foolishly bought one that had too many options that I liked, but really couldn't afford, why does that person have any less of a case to make for his bailout? His entire livelihood and his family's is in jeopardy.
You are going to tell him too bad, but his neighbor down the street who is trying to hang on to his home, "OK, we are going to help you instead".
Here is an great interview of Our Dark Lord Soros - I mean the generous-to-a-fault and ruggedly handsome George Soros on the economy and, briefly, other topics.
On the housing crisis, he says, "I'm sure that it will be necessary to arrest the decline because the decline, I think, will be much faster and much deeper than currently anticipated."
A very interesting article.
Walmart shoppers! Your costs will be going up by 15% and continue to rise.
The unregulated (completely) market of betting that a companies going to default on loans. Columbus, sounds like your kind of market. 45 Trillion is big time betting on societies pain. 5 million defaults estimated in the next several years. What this will do to the housing construction biz is not good. The bad effects from that will ripple into the rest of the population.
Thank (deity of choice, antique concept on a crutch, what ever) that our government can still scape up the 50 Mill to hire private contractors to council our pregnant teenage girls to bring all fetuses to term. Peanuts compared to the taxpayer cost of those children. One Billion dollars a year. Umm, thats just for Texas.
Fair warning! To any strawman enthusiasts. I have a fresh batch of Greek Fire on the stove. Fair warning!