Wednesday, October 29, 2008

Fed Gov't Wants To Reduce Principal or Interest for 3M HOMEDEBTORS Facing Foreclosure

From WaPo:

Treasury, FDIC Crafting Plan to Rework Millions of Mortgages


Officials with the Treasury and the FDIC (Federal Deposit Insurance Corp.) are crafting a plan under which the government would guarantee the mortgages of as many as 3 million homeowners now struggling to avoid foreclosure, according to three sources familiar with the discussions.

Under the program being discussed, the lender would agree to reduce borrowers’ monthly payments, for example by lowering the interest rate or principal of a mortgage loan, based on the homeowner’s ability to pay.

It would cost between $40 billion and $50 billion, sources said.

Read here.

And from WSJ:

"Roughly 7.3 million American homeowners are expected to default on their mortgages between 2008 and 2010, with 4.3 million of those losing their homes, according to Moody's Economy.com, a research firm." More here.

BTW? JANUARY 20 Can't Come Fast Enough To Get Rid of Treasury Secretary Comrade Paulson, One of the Premier Architects of the US Gigantic Budget Deficit.

6 comments:

Anonymous said...

JUST IN TIME FOR THE ELECTION

Anonymous said...

What does "ability to pay" mean?

Isn't this HUGE INCENTIVE for LOTS OF UNDERWATER mtge holders to FALL BEHIND?

1 in 6 is "underwater"-- if Feds will bail you out, who cares that you were an idiot and bought an overvalued house? And/or that you couldn't afford it?

Anonymous said...

Would they lower my rent payments too??? Just asking.

Larsen B said...

I want my auto loan subsidized

Anonymous said...

i'm a cheerful idiot who bought an overpriced house right here in charlottesville. i knew it at the time, and i know it now. i could not turn around and sell it for what i paid in 2006. not that i want to sell. but my mortgage is 3.5 grand a month, i'm a consultant, and we have 3 months of "living expenses" saved in the bank.

i pay all our bills on time and i'm not complaining. until now. this just kills me.

i'd like a lower mortgage, too. do i just stop taking work for a few months? get in over my head? and then apply for the principal and interest to be lowered?

like anon 2 says, what's my incentive not to do this? what's the incentive for the millions like me not to do this?!

Anonymous said...

in all seriousness, this is now being proposed for credit card holders.

sign. me. up. after i run up my bill.

http://money.cnn.com/2008/10/29/news/economy/creditcard_bailout.ap/index.htm