You think this is all about 'helping homeowners'?
Wrong. It's about campaign contributions and saving Wall Street asses.
Suppose that you have a homeowner whose house is underwater. That mortgage has been bought up by Wall Street investment banks at may be 30, 40, 50 cents on the dollar. The government now says that if the holder takes 10 percent off the mortgage, the government will guarantee 90 percent of the mortgage. So they may have bought a $100,000 mortgage for $50,000. If the mortgage holder agrees to write-off $10,000, the government will guarantee the mortgage for $90,000. You, the taxpayer, has just given these Wall Street investment firms $40,000!
Helluvadeal.
HT: Lott
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