Freezing in NH

Bush made some half-steps yesterday.  I guess providing insurance is a good thing.  I just feel that the reason some of these folks can’t get a good mortgage right now (to refinance out of their current one) is that they are a bad credit risk.  So I’m not sure I (as a taxpayer) want to be on the hook for their mistakes.  But I don’t want a total market meltdown either.  Eh, whatever. 

Despite the assertion that affecting the markets is not the goal, one administration official said Thursday evening that concern about Wall Street’s reaction did affect the timing of the briefing. He said there was a fear that if the White House announced in the morning that Mr. Bush would be making an announcement on housing, there could be confusion as buyers and sellers of mortgage securities guessed what the announcement would be.

But secondarily, this official said, helping homeowners keep their homes and refinance or renegotiate the terms of the mortgages could have a stabilizing effect on the financial institutions that have these mortgages in their portfolios, and help them write down the value of the mortgages or sell them off at a loss.

Yeah, it will be nice if things stabilize.  It doesn’t seem to take much these days for things to going into a death spiral.

“This is helpful. But you had millions of people taking loans they should not have been taking, and investors lending money at too low interest rates,” Mr. Davidoff said. “Nothing is going to make those bad decisions go away.”

Unfortunately he’s right.  There are going to be repercussions and such in the housing and stock markets for a while.  There will be over-reactions and over-tightening of mortgage standards.  I just hope they don’t enact legislation that’s too restrictive on mortage origination.  Legislation is hard to change and sticks around for a while. 

This entry was posted on Friday, August 31st, 2007 at 3:07 pm and is filed under articles, real estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.