Three weeks ago we pointed out President Bush’s careful choice of words when he spoke out against federal bailouts for struggling homeowners (“If you mean direct grants to homeowners, the answer would be `No, I don’t support that.'”). This morning, the President spoke again.
President George W. Bush today pledged to help people who’ve fallen behind in their mortgages keep their homes and to tighten safeguards against predatory lending, while rejecting a bailout for “speculators.”
“I plan to help homeowners, the government’s got a role to play,” Bush said in a statement at the White House. But, he said, “it’s not the government’s job to bail out speculators, or those who made the decision to buy a home they knew they could never afford.”
Bush said he will let the Federal Housing Administration, which insures mortgages for low- and middle-income borrowers, guarantee loans for delinquent borrowers, allowing them to avoid foreclosure and refinance at more favorable rates.
Bush said that “in the coming days” the FHA will begin a new program called FHA Secure that will permit homeowners who have a good credit rating but can’t afford their current payments to refinance into FHA-insured mortgages.
According to Bloomberg, “The president gave no estimate on the cost of his proposals. He said he also will support proposals in Congress to provide tax relief for homeowners who refinance.” Is it a token act, or simply act one of an even larger production?
∙ Housing And Credit Concerns Abound (Here And Abroad) [SocketSite]
∙ Bush Pledges FHA Help for Subprime Borrowers [Bloomberg]