THE FACTS BEHIND THE NEWS
The $700 Bil bailout, according to Treasury Secretary Paulson, will not be used to help troubled mortgage holders. Sec. Paulson has admitted he has the authority to use the money for troubled homes but has refused to do so.
Federal Reserve Chairman Berneke has said he is working on a plan to subsidize 30 yr mortgages. However his plan will only help new owners. The plan is not meant for old or present owners.
The FDIC plan for modification of mortgages by extending the life of the mortgage and reducing payments to 31% of monthly income comes closest to helping troubled homes. Even this plan only covers about 20 % of the number of troubled mortgages expected to go to foreclosure in the next few years, The FDIC expects 1/3 of the helped homes to default on the modified mortgages.
It looks to Diogenes like most of the troubled mortgage holders have been left to hang in the wind. The longer the discussions go on without any help the worse the situation will get. The large increase in unemployment rates will only accelerate the downward spiral.
Diogenes believes the President, the Congress. and the public have not faced up to the economic problems. This is a chronic problem of the Bush administration with the help of a docile spineless democratic leadership.. The face up statement can be made for terrorism, education. global warming, etc.
What PLAN if any is the pied piper of Vall St. following?
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