That’s the big headline. What it should say is Paulson plans on strong arming the mortgage industry in order to put his name in the spot light.
Millions of American saved millions of dollars by buying a low temporary rate. Now that want those rate fix at the low temporary rate.
Who pays?
There is no magic wand.
Paulson claims it is in the best interest of the mortgage company to keep wide spread defaults from occurring at any cost.
What are those cost?
There is a reason for the low short term rate offer and why it was so cheap. BANK KNEW THAT BY LOANING THE MONEY WITH AN ARM THE MAJORITY OF THESE LOANS WOULD BE RESTRUCTURED AND CASH WOULD FLOW BACK INTO THE BANKS. Paulson comes along and says because of the credit crisis it is in the interest of the banks not to have this cash inflow from the debt restructuring???!!!!!! Makes no sense!!!!!!!!
Without the debt restructuring the banks will become insolvent.
So who pays to keep the banks insolvent?
Paulson is gonna come out with his great public announcement that the 5 or more largest mortgage companies have agreed to lock in their arms for one additional year to all accounts that are current.
But the banks need the cash!!!!!!!!! So where is it coming from? Here are some ideas…
- You good folks that bough into a 15 or 30 year loan with 20% better watch out. If your check gets lost in the mail the banks know that they can foreclose on your house can collect the cash.
- Buying a car? Expect to pay more in interest now.
- Buying a new house? Better have a huge pile of money
- Mortgage insurance will soon be for everyone.
- Eliminate all dividends
- Dilute the crap out of the stock
What’s going down is not good news!!!!!!!!!!!
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$19.1 (11/30/07)
