Is it time for the bailout nation to throw some cash at homeowners?
AP: Despite the Bush administration’s historic and head-spinning $700 billion rescue of the financial industry, it will do little to ease lending standards so more homebuyers can qualify for loans, nor has it had much affect on mortgage interest rates so far.
By purchasing mortgages en masse from banks and other lenders, the U.S. Treasury will have more power to stop the cascade of foreclosures and help more Americans keep their homes, which will act as a brake on falling prices.
The question is, how fast can they act? More than 4 million homeowners were already at least one month behind on their loans at the end of June, and almost 500,000 homeowners had started the foreclosure process, according to the Mortgage Bankers Association.
Business Insider Emails & Alerts
Site highlights each day to your inbox.