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September 2008
hp-1129: Statement by Secretary Henry M. Paulson, Jr. on Treasury and Federal Housing Finance Agency Action to Protect Financial Markets and Taxpayers (http://www.treasury.gov/press/releases/hp1129.htm - broken link)
December 2008, from the article in the OP:
His recent statements seem to contradict his statements (and actions) from the past year or so. Am I missing something here?
I don't think you are. He's beginning to think more like Cramer.
I know, this seems like an egregious lie. I want to give the man the benefit of the doubt.. many claim that he's incompetent, and I've held out hope that he was honest. Now I'm starting to think that he's competently dishonest.
It may be an egregious lie, but at least his thinking has come around to the "right" side. Much better than him lying about his past positions to support a completely untenable one.
I think somebody at housingwire.com screwed up. Other news outlets are reporting a different statement.
4.5% rates: That's not a plan, that's a leak | L.A. Land | Los Angeles Times (http://latimesblogs.latimes.com/laland/2008/12/thats-not-a-pla.html - broken link)
Quote:
And since it was a leak, it's not fair to say that a plan was floated, he says. Adds Paulson: The "key thing to getting through this period is having the decline in housing prices slow down."
So no, not a flip in policy, we are still aiming to keep home prices propped up.
Folks, in a "big picture" view there is no reason NOT to have the lowest mortgage rates pushed out to the most people. Regardless of the loans being for new construction, existing homes or refi, lower rates HELPS prevent further erosion of prices, LEAVES more money in the pockets of those who borrow, allows LENDERS to make money from PERFORMING loans as opposed to having non-performing illiquid assets and finally give LOTS of people CONFIDENCE that the sky is not falling.
Of course I suspect more than a few miserable curs that have ridiculous expectations of fat returns on MBS would be oh so unhappy, but those people ought to smell the coffee and just shut the F%$* - UP! Their compatriots in pretty much every other subsection of investing have been shoved out into the cold and they must realize that their hopes for getting ANYTHING of value from the sham investment vehicles they created MUST be abandoned...
I have to admit, I'm checking rates from different sites several times a day. Wachovia had 4.5% yesterday until they were flooded w/requests, then the rates shot up again...currently they are 5.0% for a 30yr fixed...
I know its not the popular opinion right now, but why can't rates go down even lower?? I mean until they get to zero, anything is possible, right? Now of course that's extreme, but w/the current economic and housing climate, why couldn't they??
I have to admit, I'm checking rates from different sites several times a day. Wachovia had 4.5% yesterday until they were flooded w/requests, then the rates shot up again...currently they are 5.0% for a 30yr fixed...
I know its not the popular opinion right now, but why can't rates go down even lower?? I mean until they get to zero, anything is possible, right? Now of course that's extreme, but w/the current economic and housing climate, why couldn't they??
We should form up our own community of lending money. Pool a little money together and lend it interest free or at a flat rate of like $50 bucks a month. Then we're not slaves to the banks at outrageous rates and fees for 30+ years. But maybe I'm too simplistic.
Heck, I'll refinance on a 4.75%. I have plenty of equity (Which I WON'T be blowing on a trip to Europe, my daughter's education, or a new kitchen, thanks), even with the overall drop in values.
Smart.. now if only you can transfer some of that commonsense to other Americans... especially those close to foreclosure... just because you saved money doesn't mean you should be spending it... especially if you don't need it... personally I think the interest rates have been intentionally lowered, they are trying to get people to switch over to lower interest rates (especially those hit hard, foreclosure, etc.)... and instead of targeting them (and get the public anger over bailouts), they are letting everyone do it BUT they are doing it quietly and hoping most homeowners won't notice (especially those who pay their bills on time) and some homowners will notice (those close to foreclosure, etc.)... I do think this is the fair way of doing things... you do it for EVERYONE...
The critical component to help resolve the housing crisis is not lower interest rates but lower house prices, as Paulson stated(and I'm not a Paulson fan). The artificial run up in housing prices was fueled by snake oil loan products(sub-prime, alt-a, option arms) which increased the buyer pool with people who did not previously qualify. With that 'artificial' buyer pool now gone the housing industry has flipped from an excess of demand over supply(artificially driving prices up with no correlation to wages) to an excess of supply over demand. The only real resolution to this is for house prices tocome down to a level that correlates with earnings of the buyer. Until and unless this happens anything else is just a band aid fix that will only delay more serious pain later.
You are so correct. It's not the interest rate. In many areas of our country, less than 15% of the population can legitimately qualify for a mortgage based on income. 30 years of devastating the middle class income has brought us to this.
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