Tuesday, February 10, 2009

Geithner to underwater homeowners: screw you?

From Tim Geithner's prepared remarks introducing the "financial stability plan" on February 10:

The President has asked his economic team to come together with a comprehensive plan to address the housing crisis. We will announce the details of this plan in the next few weeks.

Our focus will be on using the full resources of the government to help bring down mortgage payments and to reduce mortgage interest rates. We will do this with a substantial commitment of resources already authorized by the Congress under the Emergency Economic Stabilization Act.

From the fact sheet posted on the new "financial stability plan" website:

Commit $50 Billion to Prevent Avoidable Foreclosures of owner-occupied middle class homes by helping to reduce monthly payments in line with prudent underwriting and long-term loan performance.

Sounds like more of the same old same old - focus on payment affordability with some sort of variation on the Frannie "streamlined modification program" and the FDIC "mod in a box" programs. The solution must deal with negative equity, else it will be doomed to failure...

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