Friday, December 7, 2007

Bush's plan on Marketplace

Be sure to read or listen to yesterday's Marketplace "Putting a freeze to mortgage meltdown". It covers the issues well. Excerpts:

PRESIDENT BUSH: We should not bail out lenders, real estate speculators, or those who made the reckless decision to buy a home they knew they could never afford.

MOON: "This is a Band-Aid when the patient needs major surgery."

MOON: But [Moody's chief economist Mark] Zandi does say that that assumes homeowners will be able to weather a very bad storm that's still ahead. He says he's already factored in the administration's new plan -- and even then, he's predicting a crash in home prices that will add up to more than 30 percent in many parts of the country before this crisis is over.

JOHN TAYLOR: What's been offered, at best, will probably not help more than 300,000 of the borrowers, so maybe 10 or 15 percent. It's simply not enough.

MOON: And there's even a question then, about whether this plan is going to survive in the courts, Kai. If Wall Street can't convince investors who hold all those mortgage-backed securities to go along with it, then it may be dead on arrival.

No comments: