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Post by psychecc on Oct 29, 2008 15:59:54 GMT -6
This looks bad to me. For one thing, it's 600 billion to come from the 700 billion TARP, which I guess is just a number they pulled out of their hinies, because it's a refillable 700 billion, unless I missed something along the way. Also, it's designed to "entice lenders" to renegotiate mortgages. Why do we need more special treatment for the institutions who caused this crisis in the first place? Link to much longer article follows. US May Back $600 Billion Of Troubled Home LoansReuters | 29 Oct 2008 | 05:34 PM ET US regulators are working on a new federal program that could provide government guarantees for up to $600 billion of home mortgages to help prevent foreclosures, a source familiar with the discussions told Reuters on Wednesday. The plan, being hammered out by the Federal Deposit Insurance Corp and the U.S. Treasury, could provide guarantees for up to 3 million at-risk mortgages, said the source, who spoke on condition of anonymity because the program is still being discussed. .... www.cnbc.com/id/27442009/
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Post by jeffolie on Oct 29, 2008 17:37:38 GMT -6
This expands the HOPE effort to reduce mortgage payments. The basic problems were not solved and this attempt fails the smell test. About half the foreclosures happen after the owner has abandoned the home and left an empty house with no one to renegotiate the mortage. About half the $12 Tillion in mortgages became securitized and by contract they will not be renegotiated. IndyMac tried this failed approach on its $60 Billion in problem mortgages and suceeded in merely $3 Billion or just 5% and IndyMac promoted the program heavily because the FDIC owns IndyMac.
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