I am watching Fox News Channel and they just interviewed a Whitehouse spokesman. He basically said the government has no involvement in the process. All the freeze is, is a renegotiation of the mortgage terms between the lender and borrower. One other thing he said was that the home owner must have some equity in their property. How can a subprime borrower purchase a home in early 2005, pay an inflated price, then the current market tanks and the home owner have equity in the property? Then they say 1.2 of the 1.8 million fall into this category. Doesn't compute in my mind. That dog won't hunt. There is a skunk in the wood pile.
The purpose of this proposal is not to protect the public, save a homeowner, nor prop up property prices. It is to calm Wall St. down because Wall St. is the darling of not only Republicans, but Democrats like Sen. Shumer who is the biggest fan of Wall St. going. They will do anything to calm the water down for the investment banks so that the banks can measure the damage that will occur. Once Wall St. knows how bad it will be, then they can restructure the portfolios to prevent investor panic. To Ell with the homeowner. They are going to be left twisting in the wind for the next 5 years then unceromoniously dumped in the ditch if the market has stabilized by then. Some of the talking heads think it will be 2010 before the housing markets bottom and anyone who thinks the government or the banks give a hoot about the Homeowner must have their cranial computer up their rectal storage facility.
Few homeowners will be helped by this plan. Nothing but political flatulence by creating a big stink now to prop up Wall Street and create the much anticipated year end rally. Average Joe six pack homeowner needs to have a FICO UNDER 660, be current on payments and have some equity?
all those Wall St. investors who bought all this paper in anticipation of getting a certain rate of return on all these loans. I would imagine all their Park Ave. lawyers,whom they have on retainer, are writing up the lawsuits as I type. I agree Claude, whole lotta politcal hot air.