Obama Jobs Plan May Be Aimed at High Risk Mortgage Borrowers
“It almost seems to me you want to have some type of announcement or policy, program or something from the federal government that provides that clear signal that we are here supporting the housing market and this is indeed a good time to really consider buying,”
-- Frank E. Nothaft, the chief economist at Freddie Mac, talking to the New York Times about a reported administration plan to offer lower mortgage rates to borrowers with bad credit.
At the center of the Panic of 2008 were defaults on cheap mortgages for Americans with poor credit. The latest idea to reverse the resulting recession is for the government to offer cheap mortgages to Americans with poor credit.
There have been rumblings for weeks that the economic plan to be offered by President Obama after he returns from his vacation would be aimed, at least in part, at trying to re-inflate the American housing market.
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