Obama Bails Out Reckless Homebuyers, Hoses Renters


UPDATE: Obama announced his plan this afternoon and while Jaimie Dimon called it elegant on CNBC, we have our doubts.

  • Here are some questions and answers on Obama’s plan.
  • It appears as though the plan created a government sponsored adjustable rate mortgage plan.
  •  25% of non-government mortgages go delinquent.
  • In other housing news, housing starts edged closer to zero. (A goof thing.)

We’ll have to wait until 12:15 for the official word, when Obama unveils his housing “fix” in Phoenix, but early reports suggest that there’s a little something in there for everyone.

  • Banks will be asked to lower payments for those on the verge of foreclosure. The gov’t will split the losses.
  • Homeowners who are in good standing, but underwater, may be eligible to refinancing and principle reduction.
  • Fannie and Freddie’s arsenal will be doubled from $200 billion to $400 billion in order to reduce mortgage payments.
  • Altogether, plan hopes to help 4-5 million families on the verge of foreclosure, and another 3-4 million families who are underwater on their homes.
  • Renters get: zilch.

More details as we get them in.