[quote=CA renter]
Yes, they’ve already done this with all the mortgages that *could* be refinanced over the past few years — most of the refis have been into govt-backed loans. Now, they are going to take the worst of the worst and refi those into govt-backed loans.
The whole thing stinks.[/quote]
Although I’m against any attempt to stimulate the housing market because I think the whole premise is ridiculous, per the New York Times article that Mish linked to, it looks like the current proposal is to take loans that are already government-backed and refinance them to a lower interest rate.
The proponents say the plan carries little risk because the mortgages are already guaranteed by Fannie Mae and Freddie Mac. They also say it makes those loans less likely to go into default and ultimately foreclosure.
