Been reading about this, I do not see much problem with it.

Fannie and Freddie already hold this debt and so they are already exposed to the default risk of the loans.  Lowering the interest rate will make the loans less "risky" to the homeowners so they will be more likely to keep up with payments.  The program does NOT reduce the principal amount owed.  And since you already have to be 6-months-current with your mortage payments, it would appear that the target homeowners are fairly decent credit risks.

So... I am OK with this.

What I WOULD object to is if Fannie/Freddie started offering NEW underwater loans that expose it to NEW RISK.

it's hard to say but from how it looks now, it looks like just another way to shift liability from private banks to the taxpayer. if a private bank took control of a bogus mortgage to create a financial instrument and it went south, of course they'd love to be able to hand it back to FM/FM again. it's a backdoor bailout.

it's hard to say but from how it looks now, it looks like just another way to shift liability from private banks to the taxpayer. if a private bank took control of a bogus mortgage to create a financial instrument and it went south, of course they'd love to be able to hand it back to FM/FM again. it's a backdoor bailout.


Private bank mortgages are not part of this program.  This is ONLY for Fannie/Freddie mortgages.

I would agree with you if this involved refinancing private-bank mortgages into FM/FM jobbies.

They're robbing Peter to pay Paul, what else is new?
::)

They're robbing Peter to pay Paul, what else is new?
::)


Now, now, now, they're also kicking the can down the road.  That's gotta be worth something, right?

Now, now, now, they're also kicking the can down the road.  That's gotta be worth something, right?


And they're throwing good money after bad, which should increase their favor at the polls!