Main Street Bailout
The following are excerpts from an article on Reuters.com:
"Rumors are running wild from Washington to Wall Street that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth... The actual vehicle for the bailout could be the Bush-era Home Affordable Refinance Program, or HARP, a sister program to Obama’s loan modification effort. HARP was just extended through June 30, 2011... Morgan Stanley is pushing a mortgage relief plan directly to Congress. On August 3, a top Morgan Stanley economist recommended to the Senate Budget Committee that Fannie and Freddie ease their lending standards to allow millions of Americans to refinance their mortgages."
I understand that this is a blog post, but I am curious to see what the reaction is of people to this news. Is this a real bailout for homeowners or just a well veiled bailout for the banks?
Comments (3)
I thought lowering the lending standards was one of the main reasons we are in this mess now.
Greg B., almost 15 years ago
If a note is worth $500k and is refinanced through FNFM for $300k, the homeowner gets the write off and the bank gets $200k. And the tax payers who aren't in this predicament get stuck with the bill. In my opinion, this is a bailout for the banks more than the homeowners. Readjusting the principal doesn't do anything for the person who can't find a job.
Tom Bukacek, almost 15 years ago
Hasn't the government done enough tinkering around with our economy. It we would have just been a capitalist country (like we were for so long) we wouldn't have to keep putting these patches in the holes. Ugh!!
Kevin Kaczmarek, almost 15 years ago