This might actually DEcrease risk to Fannie Mae, and therefore the cost to taxpayers. (At least in the short term.)
This might not be the best choice for homedebtors, but at least they’re taking responsibility for repaying the principal.
This won’t bail out the option ARM borrowers — I’m guessing that most of those loans aren’t held by Fannie, and in any case many of them couldn’t even qualify for a 0% refi.
I do think it’s a huge gift for the holders of 2nd TDs, HELOCs, and for mortgage insurers. They should be required to chip in. If they had any brains they’d do it without hesitation.
And as foreclosure prevention programs go, I think it’s better than forcible mortgage mods, cramdowns, and the other silly plans still being bounced around. It provides a way to save the few who can be saved, without a blind focus on “keeping people in their houses.”
