Aug 31st 2007--"...the economy "remains strong enough to weather any turbulance."...

[SoCalDem]

President Bush plans to bail out subprime mortgage holders

Posted Aug 31st 2007 9:58AM by Jonathan Berr
Filed under: Countrywide Financial (CFC), Goldman Sachs Group (GS), Toll Brothers (TOL), Economic data, S and P 500, DJIA, Bear Stearns Cos (BSC), Housing

With his popularity at an all time low and the very real prospect of the Democrats taking back control of the White House in 2008, President Bush is throwing a lifeline to subprime mortgage holders who are in danger of losing their homes to foreclosure.

snip....

and a prescient comment from that blog:

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9-01-2007 @ 9:12PM
host said...

Isn't it true that "Decider's" "plan" to "help" subprime borrowers by waiving the FHA 3 percent down payment and permitting mortgage loans in excess of 100 percent of the valuation of the underlying property, in a RE market just beginning a downward price correction that may be unprecedented in it's duration and depth, results in the following:

1.) The current lender, stuck with a devalued property in a pre-foreclosure status, receives a total, taxpayer subsidized bail out, if the FHA provides bagholder refinancing in excess of 100 percent of valuation...

2.) The bagholder who signed on to a sub-prime loan because RE prices can "only go up", to buy a property worth less now than he paid, will be "rescued" by a new loan that has him owing more than his residence is worth, with more decline to come. Doesn't this turn him into a debt slave, instead of, in the predicted course....escaping via a short sale that sees him walking away with the same tarnished credit he will have, (he's missed 3 mortgage payments....) along with his new, upside down FHA loan?

3.) Doesn't this "plan" simply transfer wealth from the US taxpayer, the bagholder, and because of this, the weakened FHA.... to the sub-prime lender?

Isn't this outcome the true intent of "Decider", and his pigmen sponsors?
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and of course when the whole house of cards came tumbling down, he was "surprised"..