I used to use words like "unbelievable" as I read proposal after proposal brought forward in late 2007 and 2008 to save us, but nothing in this hoax of a market is anymore. I wrote that 2009 will bring us "innovations" and "interventions" like nothing before (with Fannie and Freddie as the centerpiece of the toolbox) so I guess I should not be surprised by this proposal. That said, my jaw hit the floor when I read it. I hit refresh a few times - checked the calendar (nope, not April 1st) - certainly this must be a hoax. So get ready for this; no matter what your home appraises for - if it falls 10%, 20%, or 30% below purchase price, and you are underwater - you can STILL refinance under the latest proposal being floated at the full original mortgage value. Imagine a nation of people whose value of home when bought was $280K and now its $180K (as it would be appraised), but instead of being underwater $100K (i.e. out on the street when unable to refinance) the generosity of government gives the full $280K at a lower rate - 4.5% of course as part of the Treasury plan being floated. So you see where this is heading - a nation full of phony mortgage values (set by government) at a phony rate (set by government). Hello USSAR.

The counter argument will be, hey the market rate is wrong! Of course its wrong - everytime we make money off the market, then "the market" is accurate and correct - but when "the market" works against us, there must be something wrong with the system. Who cares if the market appraisal says fair value is $180K - that's wrong! Because if that's the truth, then Sally and Joe who put 0% down (ok ok maybe 2% down) and now are underwater could not refinance! And we don't want borrowers punished with an "incorrect" market values. Because the market is wrong! (on the way down) but always correct! (on the way up).

Sorry, I just have to laugh at this whole level of desperation.... if this is the stuff they are floating I can only imagine what they are thinking of in the back room meetings that they don't float, as they 'save the system'.

• Fannie Mae and Freddie Mac, the mortgage-finance companies seized by the U.S. government, are considering forgoing new appraisals on refinanced loans to help struggling homeowners, their regulator said.
• Doing away with appraisals may allow the government- sponsored enterprises to get around a law that prohibits them from financing loans to borrowers who hold less than 20 percent of the equity in their home without mortgage insurance. (yes that is what it's all about - getting around laws)
• “If they refinance someone, rather than doing a loan mod, do they need a new appraisal if they already have the credit?” Federal Housing Finance Agency Director James Lockhart told reporters after a speech in Washington today. “That’s an issue that’s being discussed. They’re looking at it.”
• Fannie and Freddie, which own or guarantee $5.3 trillion of the $12 trillion U.S.