Quote:
Originally Posted by Pressing-On
Ferd,
What was up with McCain agreeing to "buy out mortgages and renegotiate them"? I know it's in the bailout and it's too late for me to think straight. Didn't Newt have another option to get out of that?
|
this is a newer approach that isnt part of the bailout package but is a novel idea to keep people in their homes and help stablize home prices.
I am not sure who came up with the idea first, but McCain seems to be making this a centerpiece pitch.
which is going to make conservitives mad. Basically he is saying to the idiots who got loans they couldnt afford that he is going to fix thier idocy.
Basically it works like this, the Treasury buys these distressed assets.
Then they identify the loans that are really bad where the home owner is in default, cant make the payment and the value of the house has fallen below the amount of the loan.
Then Treasury renegotiates the terms, lowering the acutal face value of the loan (Lets say the borrowed 150K but now the house is worth 100K they take the 150k loan and turn it into a 100k loan). Then the home owner may be able to afford the new lower face value loan (that will also have a much lower interest rate as well) and can keep the house, and pay the new loan.
on face value I think this is a terrible idea. and I think I heard that it will cost 300 BILLION bucks.