Tuesday, December 09, 2008

Barney: Reduce Mortgage Principal

Yah, hey. Barney Frank, astute financier, has a new demand.

Frank also called for principal reductions as part of any foreclosure-mitigation effort, telling reporters that they would be an essential part of any federal plan.“The more the better,” Frank said.

“Principal reduction is a big part of it. When you reduce the principal, you give people an incentive not to re-default, that’s why I think that’s important.”

He also said that Congress will wait for the Obama administration to be sworn in before embarking on any legislation forcing loan renegotiations

"When you reduce principal, you give people an incentive not to re-default."

This is a new economic fact, folks. "Incentive" by elimination of debt?

Does that apply to General Motors, FoMoCo, and Chrysler?

While we're on the topic, BozoBarney:

...the Comptroller of the Currency John C. Dugan noted this morning that re-defaults rates appear to be well in excess of 50% for recent mods, much higher than the hoped for 40%.

Yah, that worked real good, Bozo.

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