Comments on: Busy News Day: Bush & Bernanke Both Talk Housing

By: Morgan Brown

Morgan Brown — Fri, 31 Aug 2007 23:06:53 +0000

Hi Jonathan – Bailout is going to be the word that is used the most in the press and uttered almost never by politicians. I classify a bailout as any actions to mitigate the pending foreclosure wave through intervention; whether expanding FHA loan limits and underwriting guidelines or other.

By keeping people in homes that they can’t afford we artifically keep home prices at bubble levels; which by definition are unsustainable. By keeping prices high we lock the people who were responsible, rented and didn’t fall for the 100% zero-down financing during the mania. Who deserves assistance? Those that were patient and didn’t jump at cheap money or those that took out loans they couldn’t afford?

I am still hashing out exactly where I come down on it-but that is where my head is right now. Check out my latest post with a link to my rationale supporting a bail out – I’m very confused on the issue.

By: Ann

Ann — Fri, 31 Aug 2007 22:07:10 +0000

The future of many in the mortgage business and those that were in it and can’t even help themselves….and neither Bush or Benanke is really going to save anyone(especially those in CA and Fl)..time for weeding out..

http://www.usatoday.com/money/economy/housing/2007-08-30-mortgage-brokers_N.htm

By: Jonathan Dalton

Jonathan Dalton — Fri, 31 Aug 2007 20:55:25 +0000

My question, Morgan, is if you view this as the dreaded “bailout.” I’m not seeing it, but maybe that’s because I think a bailout would be more akin to debt forgiveness than transferring one exotic mortgage into a safer product.

I read the coverage elsewhere and the “burn down the government, they are spending out money” theme doesn’t quite make sense to me.

By: Morgan Brown

Morgan Brown — Fri, 31 Aug 2007 19:34:09 +0000

Marty – I think the proposed guidance would provide financing to anyone who fell behind on their mortgage as a result of it adjusting; which would cover prime and subprime mortgages. FHA qualifications are not based on credit score, so prime borrowers could take advantage of the program as long as the loan amount met the qualifications of the program.

By: Marty Van Diest

Marty Van Diest — Fri, 31 Aug 2007 19:29:30 +0000

I wonder if there will be special help for those in trouble on their sub-prime loans, but no help for those in trouble on standard mortgages.

That wouldn’t make common sense, but it might make government sense.