FORECLOSURES SET TO RISE!

[Account Closed]

FORECLOSURES SET TO RISE!

Proceedings for about 320,000 foreclosures - or repossessions - were begun in each of the first two quarters of 2007 , against an average of225,000 per quarter in the past six years.

That ratio may turn out to be higher in coming quarters because the proportion of sub-prime borrowers, who have weaker financial conditions than prime borrowers, is higher.

Treasury Secretary Henry Paulson, spoke at a hearing, and said he will consider allowing the two government-backed mortgage companies, Fannie Mae and Freddie Mac, to temporarily buy, bundle and sell as securities any loans exceeding $417,000.

The plan is being billed as a way to inject liquidity into the stretched mortgage market.

My QUESTION:
What kind of effect would this have on the situation?