Posted on 12/06/2007 7:53:20 AM PST by SmithL
The Bush administration will unveil its methadone plan for the mortgage crisis today.
Instead of going cold turkey and letting the free market take its course, the administration reportedly has reached an agreement with lenders and mortgage investors to freeze interest rates for a select group of subprime borrowers who made bad, greedy or uninformed decisions.
"You're just giving the junkie more dope," says Christopher Whalen, managing partner with Institutional Risk Analytics, a consulting firm.
Treasury Secretary Henry Paulson also has urged Congress to pass a law that would let cities and states sell tax-exempt bonds to refinance mortgages for borrowers who otherwise might lose their homes. If that's not a bailout, I don't know what is.
Paulson offered a general outline of the plan on Monday. He identified four groups of subprime borrowers facing rate increases on their adjustable-rate loans: Those who cannot afford their payments even at the current rate; those who could afford payments at the higher rate; those can refinance into a "sustainable mortgage while keeping investors whole;" and those who can afford their mortgages today but could not at the higher rate.
Only the fourth group would get help.
According to media reports, people in this category who took out a subprime loan between January 2005 and July 30 of this year and whose rate is scheduled to rise between Jan. 1, 2008 and July 31, 2010 would have their rates frozen for five years.
(Excerpt) Read more at sfgate.com ...
Yeah, but I don’t think I’m in a bubble area. I’m in the East Bay of the San Francisco Bay Area, and home prices are still going up and up and up.
I was kinda hoping for a little “correction” so I could buy in the neighboring city with a better school district. This bailout, I think, will prevent that little correction.
So I’ll continue sending my children to private school. It’s a choice between public school and a big mortgage (and bigger house) or private school and a small mortgage (and smaller house).
“Im in the East Bay of the San Francisco Bay Area”
I lived in SF in the late 80’s.
I’m surprised to hear that prices are still increasing in the East Bay.
My wife and I look back and wish we would have bought something there in the late 80’s.
Housing prices are not going up in many areas, most of the bubble areas have come down.
This is the really scarry thing for those of us who are older. There’s just so much of that money that could be taxed much MORE! for the people/chilren ya know!
if they let us have it at all.
if they let us have it at all.
With age comes something called wisdom. Even young conservatives misread the power of the pen and proposals that pull the rug out from under working Americans. What is that saying: What goes around--comes around? And it is true!
Two stupids don't make a smart.
not here.
We need men and women that could match the Founding Fathers for intellect and a commitment to small, nonintrusive government. Instead we get pea-brains that pander with huge spending programs.
Personally, I was in the market for a new house in Arizona, but fully expected to have to wait a year or two for prices to return to some semblance of reality. Now I am not. My savings will be elsewhere - and mostly abroad...
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