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Banks/Fed Swing to the Rescue.

rose-colored-coolaidrose-colored-coolaid
edited December 2007 in Housing Bubble
http://money.cnn.com/2007/12/03/real_es ... tm?cnn=yes

Of course, like George of the Jungle, they are not particularly good at swinging or rescuing. The current plan will bailout homeowners who cannot afford* their investment (sic).

* Definition of 'cannot afford' subject to redefinition at any time. Current definition excludes those who are 'not subprime', already in default, hypothetically capable of meeting payments, investors, speculators, or those who cannot actually afford their homes.

Comments

  • perfectfireperfectfire
    edited December 2007
    I imagine that they will exclude people that lied about their income.
  • CliveLCliveL
    I like the headline of this article - the latter half
    Foreclosure rescue: No help for you
  • Lake Hills RenterLake Hills Renter
    One of the local news stations played a short blurb about how this is going to save the local housnig market. Good to know that's done with!
  • SeattleMooseSeattleMoose
    This is sounding more and more likely to be as effective as it would have been to add a few 2x4's in the basement of the World Trade Center towers the morning of 9/11 and then proclaiming...."don't worry we have reinforced the building".
  • rose-colored-coolaidrose-colored-coolaid
    CliveL wrote:
    I like the headline of this article - the latter half
    Foreclosure rescue: No help for you

    So..ah..Henry Paulson is the Help Nazi - ala Seinfeld?
  • SunTzuSunTzu
    http://www.bloomberg.com/apps/news?pid= ... refer=home
    One challenge will be to craft a deal minimizing lawsuits from investors in bonds backed by the mortgages being rewritten, analysts said. The longer that lower rates are extended, the more risk posed to the bonds' values. Republican Representative Mike Castle of Delaware has proposed legislation offering a ``safe harbor from legal liability'' to mortgage servicers.

    My question is isn't this freeze doing more harm than good?

    First, it seems to me this is sort of akin to a forced default declared by the gov't on behalf of all the subprime borrowers on all the investors who have purchased any bonds related to these mortgages (yes, I know it's not default in the strict sense because there is still payment stream). So that the value of these bonds now would really have no value/buyers even if investors want to sell them. For the banks such as C and WM that have these bonds they probably got some kind of injection deal from the gov't so they have nothing to lose. But the gov't just screwed a whole bunch of bond holders.

    Second, even though the whole details are not known, but it would incentivize those who are teetering on default to just throw in the towel and go ahead and default, so that default rate would actually increase.
  • SeattleMooseSeattleMoose
    It was almost funny to see the TV7 news anchor chirp with glee that Bush is bailing out the RE market and saving all the FBs.....

    But the devil is in the details. Basically you will NOT be saved if you are white, black, yellow, red, Republican, Democrat, Male, Female, or Catholic.

    BUT EVERYONE ELSE WILL BE BAILED OUT!!!

    I actually heard the MSM mention 30% declines in value for the first time today (from Moody's I think). Given that the MSM ALWAYS downplays bad news to the fullest extent.....you can predict at least 50% median price declines. :D
  • acurawsuacurawsu
    Flagrantly plagiarized from another blog:

    The NAR said there is no Bubble. Why do we need a bailout?
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