Your gut instinct may tell you it is not being able to make the mortgage payments. Even though we have been inundated with media coverage about this (i.e. impact of rate resets on ARMs), the truth is:
This is not the primary reason for foreclosures at all.
The main driver of foreclosures is the change in real estate prices.
The recent spike in home foreclosures in Massachusetts is caused by falling home prices, and not by rising mortgage payments, according to research released yesterday by the Federal Reserve Bank of Boston……
US Treasury Secretary Henry Paulson is negotiating a deal to freeze monthly mortgage payments on some subprime loans by delaying scheduled interest rate increases. Paulson reiterated yesterday the plan could be announced this week.
This proves that the Paulson plan is a phony PR stunt because it does not address the primary cause of the foreclosure problem. Foreclosures are mostly driven by declining homeowner equity—especially negative equity.
Paulson should be jailed. He was at Goldman Sachs.Goldman Sachs encourged the imploders to write as many loans as possible-they could package it and sell to unsuspecting foreigners( no one trusts US Paper now).
Now he is at Treasury and he is “planning to bailout ” borrowers. What a bunch of liqid crap!!
