Really it’s a negative for the bank, but better than having another REO. The bigger benefit is for the family, as long as they can still afford the increase.
However the longer term effects are much more negative.
Artifically propping up prices/values above market value, prices out a segement of potential buyers and forces banks to make up for the money elsewhere i.e. higher rates on future loans. This will delay buying decisions, slow the correction, drag out the recession, and ultimately drive prices down even longer.
Hopefully the people now paying in this case $300 more won’t have the source of income hit by the resultant recession or they’ll likely end up in foreclosure anyway.
Of course you can’t expect politicians to ever see beyond the next Super Tuesday.
I believe the White House was against the plan to raise the limits, but agreed to allow it to get the rest of the package passed. Obviously Paulson and company did not see the risks.
I believe the White House was against the plan to raise the limits, but agreed to allow it to get the rest of the package passed. Obviously Paulson and company did not see the risks.
I believe the White House was against the plan to raise the limits, but agreed to allow it to get the rest of the package passed. Obviously Paulson and company did not see the risks.
I believe the White House was against the plan to raise the limits, but agreed to allow it to get the rest of the package passed. Obviously Paulson and company did not see the risks.
