The Biden administration is pulling out all the stops to make sure Americans will “own nothing and be happy.”
Its latest tactic is encouraging more consumer debt spending through second mortgages, which seems to be less about helping Americans and more about buying votes before the election.
Carol Roth, author of “You Will Own Nothing,” believes Americans need to be warned.
“It’s the arsonists who are burning down your house, and then, they bring a water bottle and say, ‘Hey, I’m going to help put out the fire and rebuild it. It is frustrating,” Roth tells Glenn Beck before explaining what the government is doing now.
“Freddy Mac had this great idea because people have so much equity in their homes. Let us go ahead and offer second mortgages,” Roth says. “But second mortgages don’t get you into housing. Those are consumer loans. Those are people taking money out of their homes and using them whatever it is. And that equity is perceived equity.”
Meanwhile, the homeowners haven’t cashed out the house or sold the house, so it’s not guaranteed.
Roth believes the second mortgage will be “people taking their wealth, their ownership, and going and blowing it on things.”
“That’s what will happen,” Glenn agrees, noting that people will use it to pay down a credit card with a 25% rate in order to use the 9% mortgage rate instead.
“Obviously, we would rather use other money if we can to pay down 25% and taking down your ownership,” Roth says. “I think we have to ask ourselves a few questions here. One, why is it that the taxpayers should all of a sudden back consumer loans? Why is it that we want to encourage more consumer debt spending, particularly during a time of inflation?”
“And why do we want people to reduce the ownership, the equity in their homes?” she adds.
Glenn and Roth both believe this has a lot to do with the 2024 election.
“All these things make him look like the economy is doing better,” Roth explains, but if these programs are implemented as Biden is planning, the economy will be even farther from actually doing better.
“Inflation next year is going to be insane,” Glenn says, and Roth agrees, noting that programs like this are what “started the whole ball rolling with the Great Recession/financial crisis.”
“I’m super excited for taxpayers to back consumer loans,” she continues. “You’re not even backing first mortgages, you’re now backing consumer loans. Way to go, really glad that the government wants to get into that.”
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It’s no secret that the housing market in the U.S. is a giant disaster. Interest rates have skyrocketed, prices have quadrupled, and these mysterious entities seem to swoop in with cash offers and buy up many of the available homes on the market.
What’s going on?
Democratic candidate RFK Jr. recently addressed these issues on the "Tim Dillon Show."
“Not only are we, you know, suffering inflation from the constant wars,” but “also you have these three giant companies – BlackRock, State Street, and Vanguard,” who “ already own everything, and now they've decided they're going to buy every single-family home in America.”
“They're on track now to control, to own … 60% of the single-family homes in America within six years,” he explains.
It’s no wonder young people feel so discouraged these days. This is a death sentence to many people’s dreams of owning a home.
“Think about this for a second,” says Dave Rubin. “They're telling us and have been telling us for years: ‘You will owe nothing and be happy.”’
“Now the banks have gone from 2.5%-3% interest rates” to “around 9%, so the average person now if every month you have to pay 9% on that mortgage, now you're paying an awful lot,” Dave explains, “and suddenly you can't get that mortgage, you can't buy that house, and then what happens?”
“You have to end up renting,” which means “you're getting no equity, you're not building wealth over time,” and most importantly, you’re not owning anything, which is exactly what these mega corporations want.
“You can see the connection,” Dave says. “If the banks raise interest rates high enough, the average person is like, ‘I can't take out the loan’…and then BlackRock and Vanguard and these other companies come in … and they just buy the house for cash.”
Once they acquire the house, “they let it be empty … or they then allow it to be rented,” meaning they own everything, while people own nothing, which is exactly what they’ve said their plan is.
“So you see how the banks are connected to exactly what BlackRock is doing,” Dave concludes.
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The idea that “you will own nothing and be happy” is coming to fruition.
Glenn Beck long warned that government elites have been planning to push people out of homeownership and into renting, and it seems their new American dream is finally coming true.
Not only are they attempting to rid Americans of all their earthly possessions, but they’re blaming them for wanting those possessions in the first place.
Glenn references a recent article from Axios, titled "The Problem With America’s High Homeownership Rate," which claims that “America’s decades-long love affair with home ownership is holding back the economy and hobbling the Federal Reserve and exacerbating a national housing crisis.”
“We got into the ‘08 crisis because the government was pushing home ownership. Everybody became overextended. Now, they’re pushing for you to get rid of your home,” Glenn says, adding, “I think this is the first shot of the government trying to get people out of their homes.”
Former investment banker Carol Roth believes it's actually the “second shot.”
After the 2008 crisis, “Americans lost about 6 million homes to foreclosures and short sales,” Roth says.
“And then they went out because they had so much money, had to do something with it, they bought up homes,” Glenn says, finishing Roth’s point.
Roth notes that at the end of 2022, one in every five homes in America was being bought by a corporate entity.
“Now you have this gentleman from Axios, who is one of the economic media darlings, if you will, coming out and not only saying, ‘Oh, it’s really a problem that you own your home, it’s really a problem that you have this asset that’s creating legacy wealth for you and your family,’” Roth tells Glenn.
“The mental gymnastics it took for him to get there. ‘Oh, this is holding back the economy, and this is crippling the FED,’ as if it wasn’t FED policy and the government policy that got us here in the first place,” Roth adds.
“The idea that they’re blaming you for creating wealth instead of blaming the arsonists who burnt down the economy — the government and the FED — is absolutely despicable.”
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The point of having good credit is to be rewarded with better treatment and lower rates, right?
Well, according to the Washington Times, it now is the opposite.
Starting on May 1 under a new Biden rule, Americans with good credit scores will be forced to pay higher mortgage rates than those with poor scores.
Glenn Beck’s co-host Stu comments, calling it a “fundamental reversal of all economic theory.”
Beck calls it “stealing from the rich to give to the poor” and a “redistribution of wealth.”
He then compares it to the financial crisis of 2008.
“Wasn’t there something like this that happened? Two thousand four, five, six, and seven?” He continues, “They were incentivizing banks to give loans to people who couldn’t really afford the houses.”
“Although, at least in that case they weren’t punishing the people who were paying their bills,” Stu adds.
“If you don’t understand the concept that socialism and all of this stuff — it’s not going to make anybody happy. We’re all going to be equally miserable.”
“You won’t own anything. This is how it begins.”
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American home buyers who have good credit scores will be penalized in an effort by the Biden administration to achieve equity. The higher fees for those with good credit will be redistributed to home buyers with poor credit.
As part of the U.S. Federal Housing Finance Agency’s push for more affordable housing, home buyers with good credit scores will be forced to pay additional fees on their mortgages. Starting on May 1, the federally backed mortgage companies Fannie Mae and Freddie Mac will establish new loan-level price adjustments with private banks nationwide. Those additional fees will be used to subsidize home buyers with risky credit scores.
The Federal Deposit Insurance Corporation defines loan-level price adjustments as "risk-based pricing adjustments that vary based on credit score, loan-to-value ratio, type of product, and various other factors, charged at the time of origination."
The Washington Times reported, "Mortgage industry specialists say homebuyers with credit scores of 680 or higher will pay, for example, about $40 per month more on a home loan of $400,000. Homebuyers who make down payments of 15% to 20% will get socked with the largest fees."
According to the New York Post, "Meanwhile, buyers with credit scores of 679 or lower will have their fees slashed, resulting in more favorable mortgage rates. For example, a buyer with a 620 FICO credit score with a down payment of 5% or less gets a 1.75% fee discount – a decrease from the old fee rate of 3.50% for that bracket."
Ian Wright – a senior loan officer at Bay Equity Home Loans in the San Francisco area – told the Washington Times, "The changes do not make sense. Penalizing borrowers with larger down payments and credit scores will not go over well. It overcomplicates things for consumers during a process that can already feel overwhelming with the amount of paperwork, jargon, etc. Confusing the borrower is never a good thing."
David Stevens – a former head of the Mortgage Bankers Association who served as commissioner of the Federal Housing Administration during the Obama administration – declared the new rule to be "unprecedented."
"This was a blatant and significant cut of fees for their highest-risk borrowers and a clear increase in much better credit quality buyers – which just clarified to the world that this move was a pretty significant cross-subsidy pricing change," Stevens told the New York Post.
Stevens wrote on social media, "This confusing approach won’t work and more importantly couldn’t come at a worse time for an industry struggling to get back on its feet after these past 12 months. To do this at the onset of the spring market is almost offensive to the market, consumers, and lenders."
Federal Housing Finance Agency Director Sandra Thompson – who was appointed by President Joe Biden – defended the rule changes by stating they would "increase pricing support for purchase borrowers limited by income or by wealth." She said the fee changes are "minimal" and are "to ensure a level playing field for all lenders to have sufficient time to deploy the fee." Thompson added that the fees would provide market stability.
Bob Broeksmit – the president of the Mortgage Bankers Association – fired off a letter to Thompson in February decrying the new rule as "especially troubling." He noted that the debt-to-income ratio fee creates "operational issues and quality control" for lenders.
The new rules arrive as the housing market struggles after the average 30-year fixed mortgage rate spiked to more than 7% in March following multiple interest rate increases by the Federal Reserve. In January 2021, mortgage rates in the U.S. set a record low – 2.65% for a 30-year, fixed loan.
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