Is George Bush trying to bolster his falling ratings, support major investors in mortgage securities, or do the right thing?
If he intends to do the right thing by all the homeowners out there who wanted “a piece of the American Pie,” he should broaden his plan for a bailout. It could be a lifesaver for those few – some say only 25% of the 10% locally who bought with subprime mortgages – who will be affected. Many or most of the others are still caught in the mess. Today a loan officer relayed the story of someone whose loan adjusts by $700 a month, beginning this month. Because his adjustment is in December instead of January, he’s ineligible for the rate freeze.
Another person was late on only one payment in the last twelve months, but he in ineligible because of that one payment.
What is needed is a broad plan for all homeowners, because the overall effects will spread into the economy as a whole and that will have long term consequences that will affect everyone: homeowners, investors, renters, and the general public.
We are lucky to be living in Austin. We had relatively few subprime loans here, our real estate market is healthy with stable or slowly rising prices, and the local job market continues its steady growth.