Fannie Mae and Freddie Mac, the walking-dead government-owned mortgage-finance companies, announced Tuesday that they will accelerate their anti-responsibility efforts with a new accountability elimination program designed to cut financial obligations for struggling debtors.
The mortgage giants will target loans in which borrowers have given up paying back their mortgages for three months or more and have debt obligations that exceed fifty percent of their monthly income.
“Clearly the best solution to this crisis is to reward individuals that took out ridiculously unaffordable loans,” said Neel Kashkari, interim assistant Treasury secretary, in a prepared statement.
“Everyone involved in making and receiving these loans knew full well that there was zero chance they would be paid back on the original terms,” said Kashkari. “If only home prices had continued to increase by double-digit percentages every year in perpetuity, this whole mess could have been avoided.”
The initiative expands efforts by the Free Money Now Alliance, a group of investors, advocacy groups, and mortgage lenders and servicers that Treasury Secretary Henry Paulson helped create last year. The primary role of the FMNA is to work with the US government to distribute taxpayer money to as many irresponsible individuals and corporations as possible.
Paulson has called the artificial propping up of still unsustainably-high housing values central to the economy’s revival, and urged Fannie and Freddie to play a bigger role in the distribution of free money to reckless borrowers and lenders.
“If we can’t keep families and businesses from experiencing the negative consequences of foolish financial decisions made during the largest housing bubble in history, it’s really going to continue to damage the economy,” said Paulson.