Taxpayers Insure $1.7 Billion in Losses from Reverse Mortgages

27 Sep 2013

FHA to draw $1.7b from Treasury to cover losses –

A federal housing agency said Friday it needs a $1.7 billion bailout from the Treasury to cover projected losses in a mortgage programs for seniors.

At issue are reverse mortgage programs, which allow seniors to borrow against their homes for everyday living expenses.

Reverse mortgage borrowers, who must be 62 or older, can take lump-sum or monthly payments. They still must pay property taxes and insurance. Sale proceeds from a home go to the lender when the borrower dies or moves out.

The FHA suffered big losses when many borrowers took large payments up-front and later ran into financial problems, often due to falling home values during the financial crisis.

The agency has sufficient cash to pay insurance claims against mortgage defaults, Galante said, citing more than $30 billion in cash and investments on hand, Galante said.

The cash infusion from the Treasury is about twice as much as the Obama administration projected would be needed in April. Obama’s fiscal 2014 budget request said the FHA would probably need $942 million.

There’s much to be taken from this account.

The reverse mortgage industry is one where the people living in the home have nothing to lose. The banks have nothing to lose. The taxpayers are on the hook for the loses that are incurred.

The Obama Administration planned for the program to lose money. They were off – needing twice as much to cover their losses.

Interesting that with almost $17 trillion in debt, the FHA has $30 billion in cash and investments on hand. What other agencies has cash on hand?

So much of this is questionable at best.


U.S. Citizens in Residing in Foreign Countries Renouncing Citizenship

27 Sep 2013

Why are Americans giving up their citizenship? – BBC News Magazine

The number of expatriates renouncing their US citizenship surged in the second quarter of 2013, compared with the same period the year before – 1,131 cases to 189 in 2012. It’s still a small proportion of the estimated six million Americans abroad, but it’s a significant rise.

The list is compiled by the Federal Register and while no reasons are given, the big looming factor seems to be tax.

A new law called the Foreign Accounts Tax Compliance Act (Fatca) will, from 1 July next year, require all financial institutions around the world to report directly to the US Internal Revenue Service (IRS) all the assets and incomes of any US citizens with $50,000 (£31,000) on their books. The US could withhold 30% of dividends and interest payments due to the banks that don’t comply.

So the government is blackmailing the banks by withholding money that foreign banks should receive in order to get financial information in order to tax citizens living in other countries. I wonder if this is legal? Does it include military personnel?

Some say they are tracking down tax-dodgers. Those overseas say the existing filing process is to complicated, and it is costly to get others to do it – so they skip the whole process. Now with this new regulation, they are renouncing their US citizenship. Can’t blame them.

Congressional Delay – Obamacare Text Would Make Costs Skyrocket for Staff

26 Sep 2013

So it looks like this is a snafu in the writing of the law.

Hill gets Obamacare fix – Politico (Aug. 2, 2013)

The Office of Personnel Management, under heavy pressure from Capitol Hill, will issue a ruling that says the government can continue to make a contribution to the health care premiums of members of Congress and their aides, according to several Hill sources.

The problem was rooted in the original text of the Affordable Care Act. Sen. Chuck Grassley (R-Iowa) inserted a provision which said members of Congress and their aides must be covered by plans “created” by the law or “offered through an exchange.” Until now, OPM had not said if the Federal Employee Health Benefits Program could contribute premium payments toward plans on the exchange. If payments stopped, lawmakers and aides would have faced thousands of dollars in additional premium payments each year. Under the old system, the government contributed nearly 75 percent of premium payments.

The delay mentioned in my previous post is regarding this. They are trying to ensure that their Fed Health Plan contributes to the costs.

Congress Tells Staff To Wait To Sign Up For Health Exchanges

26 Sep 2013

Internal Senate email warns lawmakers not to sign up for Obamacare yet – Washington Times

The Senate this week warned lawmakers and their staff not to sign up for Obamacare’s health exchanges, saying that the administration hasn’t yet finalized the rules for how to keep paying for their premiums.

“Members and staff are advised that they should delay enrolling in health insurance plans until we are able to offer further guidance as to how they should enroll in these insurance plans for 2014,” the Senate disbursing office said in an email to staffers Monday. “Premature enrollment could adversely impact eligibility for the employer premium contribution.”

“Members and staff are advised that although state and federal healthcare exchanges created under the ACA will open for enrollment on October 1st, it will not be possible to confirm plan options, costs, benefits, or which House staff will be affected until OPM issues final regulations, which could very well be after the exchanges have already opened,” the House administrative office said.

I guess that means we should not rush to sign up either.

Private Prison Corps Require 90% Occupancy or Gov’t Pays

26 Sep 2013

Slave Dollars: State Guarantee Private Prisons 96% Occupancy – Story Leak

State and local governments have signed contracts that obligate them to keep a certain number of people in jail (with numbers around 96% occupancy) to bolster the profits of privately run prisons, a survey indicates.

If the governments don’t maintain the specified number of people behind bars, they have to pay penalties to the companies that operate private prisons. The state of Colorado paid $2 million to companies because the rate of crime and the number of convicts in the state fell by a third in the last 10 years.

The profit driven prisons put pressure on law enforcement and prosecutors to try to charge and convict individuals of more serious crimes just to fill prison beds. It also encourages authorities to send prisoners to private penitentiaries rather than state facilities even if they are cheaper.

Despicable stuff here…

It’s pretty bad when people bank on the failures of others to make a profit. I understand rendering services for a need that is less than desirable. But inserting clauses to guarantee a certain amount of prisoners is unethical.

I have heard of sin taxes… never heard of a good behavior tax.


For further reading…
Criminal: How Lockup Quotas and “Low-Crime Taxes” Guarantee Profits for Private Prison Corporation

Pelosi: Losing the 40 Hour Work Week Means Freedom

26 Sep 2013

Pelosi: Death of 40-hour work week means freedom to ‘follow your passion’

Americans with a lot free time on their hands thanks to Obamacare can spend it pursuing their happiness instead of earning a living, House Minority Leader Nancy Pelosi said Sunday.

Some parts of Obamacare need to be clarified, she acknowledged, but losing that 40-hour work week will really free Americans to “pursue your happiness … follow your passion.”

“It’s about wellness, it’s about prevention, it’s about a healthy America,” she said.

Did anyone ask to remove the 40 hour work week? Were there any complaints?

Maybe one of the characteristics that made America exceptional is that we worked harder and we produced more.

The 40 hour week allows you to make more money to provide for yourself and your family. It also generates more taxes, which we will need to pay down the debt that Pelosi helped run up.

U.S. Delivers Weapons to Syrian Rebels

13 Sep 2013

This is giving support to the Muslim Brotherhood in their attempt to take over Syria.

Washington Post – U.S. weapons reaching Syrian rebels

The CIA has begun delivering weapons to rebels in Syria, ending months of delay in lethal aid that had been promised by the Obama administration, according to U.S. officials and Syrian figures. The shipments began streaming into the country over the past two weeks, along with separate deliveries by the State Department of vehicles and other gear — a flow of material that marks a major escalation of the U.S. role in Syria’s civil war.

The arms shipments, which are limited to light weapons and other munitions that can be tracked, began arriving in Syria at a moment of heightened tensions over threats by President Obama to order missile strikes to punish the regime of Bashar al-Assad for his alleged use of chemical weapons in a deadly attack near Damascus last month.

The latest effort to provide aid is aimed at supporting rebel fighters who are under the command of Gen. Salim Idriss, according to officials, some of whom spoke on the condition of anonymity because part of the initiative is covert. Idriss is the commander of the Supreme Military Council, a faction of the disjointed armed opposition.

The article also says that the shipments would travel through expanded military bases in Turkey and Jordan. Did anyone know that we have expanded military bases in that region?

They ran a test run of 350,000 packets of food supplies to the rebels. Now the next run will be shipping non-lethal weaponry (vehicles, body armor, night vision goggles, etc). Ultimately, the rebels want “antitank and antiaircraft weapons.” They will probably get those in time.