Bush’s Bailout Plan Bursts
Those hoping to leverage a 2nd mortgage loan towards a mortgage bailout may want to do so now before interest rates skyrocket.
According to Naked Capitalism:
Note we have doubts about “rescue debtor” operations. Iin many cases, these borrowers had little to no equity in their home, which begs the question of why it is so awful for them to lose their home. Indignity, yes, tragedy, no.
But a cynical plan to do nothing while pretending to offer relief is even worse than standing pat. It gives homeowners and possibly mortgage investors false hope and forestalls discussion of the tough choices that need to be made (the residential housing market is simply too large for the Feds to rescue), But then again, if your aim is merely to leave this problem in the lap of the incoming regime, a Potemkin program like this is exactly the sort of thing you want.
Not much of a surprise there. The bailout plan is not going to drive rates downwards.
City lies to Investors
Things have been looking ugly for investors lately, with it becoming increasingly difficult to successfully pay off mortgage debt.
According to the Miami Herald:
Harriet and Paul Fass, both 65 and hoping to soon retire, aren’t rich.
Even so, the Wilton Manors couple cobbled together $100,000 to invest in the financing of a private housing development in Florida City, in the midst of the region’s real estate boom.
It was a risky business venture, somewhat cushioned by a supposed security blanket of promised government intervention: A Florida City public official had guaranteed, in writing, to bail out the project if it stumbled.
”It sounded safer than the stock market,” Harriet Fass said of the real estate deal.
Now the Fasses, and some four dozen other investors, are facing the prospect of losing hundreds of thousands of dollars. Some families’ entire life savings could be wiped out.
Apparently the city has backed out leaving these would be investors with a large loss.