The original terms of “FHA Secure” required a minimum of 3% equity. The fees to get that FHA loan aren’t cheap.
Although Paulson plan is being presented as NOT being a bailout plan because it doesn’t involve govt money, it IS a bailout plan for some lenders and Paulson’s Wall Street buddies. It’s not in the best interest of the homeowner who is upside down and living in a house that they cannot afford.
One premise of the plan is that 5 years will give the market time to recover, (which is a laugh)
It’s just making the problem somebody else’s in 5 years, with investors facing larger losses at that time.
Most that are involved in creating this plan today will be gone, dead or retired, and in complete amazement someone will be called back into service as a “consultant” at high pay to continue the myth that the problem can be solved.
In an election year, it is an attempt to prevent a complete collapse of housing. The “orderly chaos” will extend so that people lose houses to FC over a longer period of time, rather than all at once.
Some will bleed their savings/retirement/piggy banks making a payment that they cannot afford, falsely thinking that the market will recover,eventually losing their house anyway.
What many people just cannot accept is that the heights of the bubble was only an opportunity of a lifetime to sell out, not to buy in. The correction simply cannot happen, any more than the NASDAQ is going back to 5000 anytime soon.
Housing prices cannot be artificially supported any more than the price of inflated dot com stocks could.
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