President Bush will announce today that he wants the [tag-tec]Federal Housing[/tag-tec] Administration to step in and help an estimated 80,000 subprime distressed owners to save their homes.
This has never happened before since the FHA’s past policy has been not to take a role in stopping foreclosures.
One reason for this unprecedented move may be because of the numbers. Almost 16% of [tag-self]subprime borrowers[/tag-self] are already in trouble. $600 billion is scheduled to be reset to increased rates from now to the end of 2008.
I believe it’s an effort to save the economy from a [tag-ice]recession[/tag-ice]. If large numbers of these distressed owners go down they could possibly take not only their lenders, but many retailers and possibly the car industry with them.
After all, if you are having money troubles, you can’t spend. But perhaps that’s where all these problems started. Over spending.
But it may be more of a political move. 2008 will be an election year. Seeing distressed owners on the 6 o/clock news every night won’t fare well for voters.