Government sponsored home refinance? An economic stimulus?
I question what portion of the housing bubble burst was due to federally insured rather than non-federally insured home loans.
[Regardless of what and who caused the bubble or its bursting, the federal government is still financially liable due to those loans. Housing foreclosures are greatly detrimental to our economy, costly to the federal home loan insurance programs and thus costly to our federal deficit.]
Interest rates have dramatically been reduced since those loans were made. Many if not most homeowners are unable to benefit from the reduced interest rates induced by the Federal Reserve. They cannot refinance because their equity is less than their outstanding mortgage, and/or they’ve already missed some mortgage payments and/or their financial position has deteriorated.
It’s been suggested that a federal program promote such refinancing of federally insured loans e anyway because we are already insuring and thus indirectly liable for the outstanding loans. If no additional take-out cash were permitted, other than administrative expenses there’d no additional federal cost or financial exposure. To whatever extent the homeowners' reduced monthly mortgage payments increase consumer spending and reduce foreclosures, it will be an economic stimulus.
Banks in aggregate will suffer reduced incomes due to the loans’ reduced rates. That may be an economic detriment and a social benefit?
Respectfully, Supposn
I question what portion of the housing bubble burst was due to federally insured rather than non-federally insured home loans.
[Regardless of what and who caused the bubble or its bursting, the federal government is still financially liable due to those loans. Housing foreclosures are greatly detrimental to our economy, costly to the federal home loan insurance programs and thus costly to our federal deficit.]
Interest rates have dramatically been reduced since those loans were made. Many if not most homeowners are unable to benefit from the reduced interest rates induced by the Federal Reserve. They cannot refinance because their equity is less than their outstanding mortgage, and/or they’ve already missed some mortgage payments and/or their financial position has deteriorated.
It’s been suggested that a federal program promote such refinancing of federally insured loans e anyway because we are already insuring and thus indirectly liable for the outstanding loans. If no additional take-out cash were permitted, other than administrative expenses there’d no additional federal cost or financial exposure. To whatever extent the homeowners' reduced monthly mortgage payments increase consumer spending and reduce foreclosures, it will be an economic stimulus.
Banks in aggregate will suffer reduced incomes due to the loans’ reduced rates. That may be an economic detriment and a social benefit?
Respectfully, Supposn