- Why Stronger Chinese Yuan Would Benefit US Investors
- Hewlett-Packard to Acquire 3Com for $2.7 Billion in Cash
- AIG CEO: I Remain 'Totally Committed' to Firm
- CNN Anchor Lou Dobbs Says He is Leaving Network
- How the Droid and Google Threaten the GPS Makers
- A Day on the USS Harry S. Truman
- Commercial Real Estate Near Disaster: Fund Manager
- This Town Will Pay YOU $10,000 to Buy a House
- Billionaire Paulson Raises Cadbury Stake Again
- What to Expect From Disney Earnings?
- HP's Shot Across Cisco's Bow
- USC Football Blog Leads All-Access Space
- Clowning Around At Work
- Ahead of Earnings Disney Restructures Studio
- Nov. 11: Unusual Volume Leaders
- 3 'Clear Sailing' Mid-Caps For Investors: Strategist
- Intimate Apparel Sales Heating Up: Maidenform CEO
- A Day On The USS Harry S. Truman
MOST SHARED
- Hewlett-Packard to Acquire 3Com for $2.7 Billion in Cash
- USC Football Blog Leads All-Access Space
- Dollar Trouble, Oil's Bubble Could Derail Recovery
- Addicted to Easy Money?
- Credit Is Thawing, But Businesses Still Hesitant to Borrow
- Why Stronger Chinese Yuan Would Benefit US Investors
- Oil Tomorrow
- HPQ to Acquire 3Com
Text Size 
President Bush outlined reforms to help struggling subprime mortgage borrowers. This is the president's first formal response to the subprime housing crisis since the problem began snowballing this past February.
What is the President proposing?
The key part of Bush's proposal is legislation that would give the Federal Housing Administration (FHA) flexibility to help more subprime borrowers refinance their delinquent mortgages. The measure would give the FHA the power to guarantee subprime loans for people at least 90 days behind in mortgage payments.
Is this a bailout?
The President insists his program is not a bailout for banks, or borrowers but assistance to homeowners at risk of losing their homes to enable them to refinance their mortgages at more favorable terms.
Bush has previously stated that he is not in favor of a direct bailout of homeowners.
But Michael Panzner, Wall Street trader and author of Financial Armageddon, says the Bush plan is a bad idea.
"In reality, guaranteeing loans for homeowners who can’t afford the payments, encouraging mortgage-holders to hang on until they’ve been bled dry, and giving false hope to those who would be better off cutting their losses really only benefits one group," says Panzner. That group, he says, is "The lenders".
How many people will be helped by the president's program?
In contrast to the two million subprime mortgages with interest rates which will reset upwards in the next two years, the program's reach is small in scope.
The proposed changes in the FHA's mortgage insurance program would enable an additional 80,000 homeowners sign up for help beyond the 160,000 likely to use it next year.
Who is Eligible?
The president's program is aimed at helping low income homeowners with adjustable rate mortgages.
What are other features of the President's subprime intervention?
The President is pledging to work with Congress to reform the tax code to help troubled borrowers renegotiate loan terms.
The president is also calling for greater enforcement of predatory lending laws and tightening lending standards.
Print
Email
- Bernard and Ruth Madoff's personal possessions will be auctioned this weekend. Click ahead to see.
- US real estate prices have fallen dramatically, but some places are still doing well. See the best-performing zip codes this year.
- An Italian cashmere maker aims to make profits while creating ideal conditions for his workers.
- Just in time for the holidays, the Triumph company of Japan offers the latest innovation in women’s undergarments.
- The real result of health care reform will be bloated government and higher deficits, says Larry Kudlow.
- Vote and suggest your own, and remember--there's a fine line between a hero and a zero.
Data is a real-time snapshot *Data is delayed at least 15 minutes