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What Happened? A Summary of the Homeowner Affordability and Stability Plan

By Brian | February 20, 2009 | Share on Facebook

In the spirit of my previous post – What Happened? A Summary of the Financial Crisis, I present what I hope will be a factual, non-partisan view of President Obama’s recently announced plan to reduce home foreclosures – the Homeowner Affordability and Stability Plan.

If such things interest you, click below the fold. Otherwise, please enjoy my next post, which makes reference to alcohol, gambling and sex.

Before we get started, the same disclaimer I made in my previous post:

This comes from me and from me alone. While I

Topics: Money Talk, Political Rantings | 5 Comments »

5 Responses to “What Happened? A Summary of the Homeowner Affordability and Stability Plan”

  1. FamilyGreenberg.Com - What Happened? A Summary of the Financial Crisis says at February 26th, 2009 at 2:16 pm :
    […] What Happened? A Summary of the Homeowner Affordability and Stability Plan […]

  2. Jeff Porten says at March 2nd, 2009 at 4:09 am :
    February 20th? Man, I must be slipping.

    Arguing finance with you remains a fool’s errand, but what really bugs me about your post — and 90% of the public debate — is where you choose to be creepily moralistic in your language. For example: “the red-hot market encouraged lenders to relax their standards” implies that lenders were just doing business. Whereas “people who wanted a larger home than they could afford” are obviously greedy, inept, or vaguely criminal.

    My question: it’s 2005, and someone is considering a mortgage. Their options are the ones that have higher monthly payments, or the ones that have lower monthly payments. No matter how many good reasons there might be to go with the one with higher payments, isn’t it quite likely that you’re going to feel like a schmuck, and have many corporate voices lined up to reinforce that feeling?

    It seems to me that sub-prime and balloon interest rates are simply designed to prey on human nature and gullibility. Who doesn’t want to believe that they’ll have better incomes in five years? How many borrowers have the skills to resist when their lenders and media experts tell them that refinancing in five years is a good idea?

    Anyway, from where I sit, it seems the more accurate assessment is that the mortgage industry is generally made up of jackal scumbags, and their customers in trouble are idiots for believing them. The narrative that makes most of the borrowers out to be scumbags strikes me as, well, carefully crafted and extremely expensive, seeing as how it has worked so well. The average guy who identifies with Joe the Plumber is downright terrified that his neighbor might be getting away with something, instead of whether his banker did.

    Of course, we could answer this question with metrics; I’m sure someone could compile financial measurements that show us how many people were greedy, how many were stupid, and how many were outright victims of fraud. What do you think the odds are that the mortgage industry will share that data with us?

    This is very similar to what reinsurance does for insurance companies – it increases their capacity to do business by distributing a portion of their risk. It doesn

  3. Brian says at March 2nd, 2009 at 10:30 pm :

  4. FamilyGreenberg.Com - Validation from Above says at March 9th, 2009 at 2:18 pm :
    […] What Happened? A Summary of the Homeowner Affordability and Stability Plan […]

  5. FamilyGreenberg.Com - What Happened? The AIG Bonus Kerfuffle says at March 18th, 2009 at 5:02 pm :
    […] [The third in a series of “What Happened” posts that endeavor to explain the causes and impacts of the Current Financial Crisis(TM) – the first two parts are available here and here.] […]