President Bush Expected to Give Mortgage Market a Boost
In recent weeks, many at the Federal Reserve and in the government have gone from insisting that the subprime lending crisis is under control to acknowledging that it is very much out of control. As the Fed tries to boost confidence in the credit market, turning up rather ineffectual measures, the government has decided that it’s time to step in.
The news that President Bush is planning to join the Federal Reserve in trying to relieve the mortgage market is sending a measure of relief through credit and stock markets today. Bush has announced that he has a plan to help some homeowners facing foreclosure, and some who have seen increases in their payments due to teaser mortgage interest rates transforming into hefty variable rates.
President Bush offers the FHA as a solution
President Bush’s plan is to offer FHA insurance to some homeowners. This insurance would help cover them if they have missed mortgage payments. The idea is to avoid foreclosure if possible. This is expected not only to help homeowners, but also to aid the mortgage market and stem some of the fallout from the subprime lending crisis. The Wall Street Journal has more on the plan offered by President Bush.
MarketWatch also reports on the FHA insurance plan, and mentions that Bush’s remarks will be given later this morning:
President Bush is due to speak at 11:10 a.m. Eastern on “homeownership financing,” according to the White House.
The Bush plan would allow about 80,000 homeowners to refinance their mortgage, official said. Some groups have estimated that as many as 2 million homeowners are at risk of foreclosure.
No one knows the exact impact that this move will have on those facing foreclosure, or whether it will really help abate the subprime lending crisis. But the stock market is up this morning, and the news has momentarily arrested the dollar’s decline on the foreign exchange market.
Tags: mortgage interest rates, President Bush mortgage market, home mortgage loan, mortgage market boost,
subprime lending crisis, Bush FHA insurance, President Bush subprime lending plan
