It’s not going to help much if the FED cuts rate. The real damage is already done. At minimum, 2 million home owners are stuck with 2/28’s and 3/27’s at high LTV’s(loan to value) with marginal credit at best. When those loans start to adjust 18/24 months from now, very few of them will be able to refinance. And when these arms adjust.....its not pretty. Almost every major subprime lender is out of business. The ones that are still open, aren't offering anything close to what they were offering 6 months ago, and are struggling to keep from going out of business themselves. These arm holders are screwed. They have nowhere to turn. The last thing I want to see is “doom & gloom” however its not looking good. IMO the FED cant help unless they figure out how to get people out of these arm’s.
The toothpaste is already out of the tube.
Oh, the sub-primers *are* screwed. We’re well past the point of saving them. Chalk up several hundred thousand in the tank.
I’m talking about saving the *rest* of our economy. That, the Fed can do with some more cash injections and Fed Fund rate cuts (which will happen starting next month).