This is Ron Phipps’ letter to The Wall Street Journal in its entirety, because you won’t want to miss one single stupefying word of it.
Thanks very much to Burbed reader PKamp3 for mentioning this exchange in comments.
The Wall Street Journal would have people believe that hard-working, middle-class families are not affected by lower conforming loan limits, when nothing could be further from the truth ("More McMansion Subsidies," Review & Outlook, Nov. 1). The representatives in Congress who support higher loan limits understand that this is not a partisan issue, as you are trying to make it out to be.
The majority of markets impacted by the loan-limit decline are not high-cost areas. For example, more than 100 counties throughout the Midwest and more than 200 counties in the South have seen loan limits decline by more than $64,000.
And despite how your editorial tries to position the issue, the loan limits are not the same as reforming Fannie Mae and Freddie Mac. Allowing the mortgage loan limits to expire in October was an arbitrary decision. Creating more market disruptions before reforming mortgage markets will only hurt our recovery.
The Senate measure to reinstate the limits is temporary—restoring the higher limits while the housing and mortgage markets stabilize. Recently, economist Mark Zandi said policy makers could shore up the housing market by "extending the current higher conforming loan limits that are set to decline in a few weeks." Borrowers, not taxpayers, will bear the entire cost of the higher loan-limits provision.
As people across the country are trying to gain a foothold in these trying times, we need to give them the resources to do so. The National Association of Realtors applauds the members of Congress who are standing up for America’s families rather than turning their backs on them.
National Assn. of Realtors
Of course this is 100% Grade AAA horseapples and every one of us should feel stupider for having wasted three minutes in reading it. In fact, this is such toxic waste even the WSJ editorial page couldn’t leave it without a response as an unsigned opinion piece. (It’s behind the paywall, but the best way to find it for free, should this link not work, is to search for its title with teh Google.)
Crony capitalism on parade.
To understand why 90% of U.S. mortgages are still underwritten by taxpayers, look no further than the nearby letter from Ron Phipps of the Realtors lobby. He makes clear that the Realtors, like the rest of the housing-subsidy crowd, are working hard to get Congress to reinstate a $729,750 loan-limit for Fannie Mae and Freddie Mac guarantees.
Notice how Mr. Phipps doesn’t mention that dollar figure, perhaps because it makes a howler of his claim that the loan-limit reduction in October to $625,500 is somehow a blow to the "middle class." As House Financial Services Chairman Spencer Bachus and several colleagues note in a November 7 letter to GOP appropriations conferees, "the lower loan limits only affect a very small slice of wealthier homeowners in high cost areas." Only 1.3% of all loans done by Fannie, Freddie and the Federal Housing Administration would be affected by the change.
And it goes on from there. I’m sure you could write your own takedown of Phipps’ inane, self-serving, logic-free effluvia, and in fact I bet you could have a lot of fun with it. I am chucking a bit noting the Wall Street Journal use the terms “crony capitalism” and “lobby” as if they’re bad things. Should we look forward to them setting up a tent (mink-lined, probably) in Zucotti Park?
Here’s a few more things the WSJ neglected to mention but I’ll bring up.
- The “non-high-cost areas” affected purportedly include more than 100 flyover counties in the Midwest and 200 in the South. Phipps neglected to tell you how many total counties are worth flying over, but I suspect it’s more than 300.
- A free clue: Georgia has 159 counties.
- Borrowers will bear the entire cost? Oh, now borrowers fund their own tax deductions? Then why is the deficit so high? Do corporations fund their own R&D credits too?
- And remember, this is your Weekend Open Thread!