Why did Bush announce a mortgage bailout plan?

[Robbien]

We know he doesn't give a care for anyone lower than the haves and the havemores.

From Elizabeth Warren over at Josh Marshall's Cafe

I've been struggling to understand the real point of the Administration's headline-grabbing plan to deal with subprime mortgages. Now that I've read the plan (thanks to Bob Lawless at Creditslips), it seems to be nothing more than a guideline for when some lenders or servicers might let some borrowers extend lower interest payments for a while before the interest jumps up later. The loan on the house stays the same, even the family owes much more than the house is now worth--a circumstance that will cut off any refinancing option and any real resolution of the problem. The plan doesn't require any new laws or government intervention because no one is bound to anything. I can't quite figure out what the plan accomplishes that the lenders couldn't do without the plan--if they were in a mood to deal fairly with borrowers, acknowledge their losses, and start cleaning up the mess before it takes down the whole economy.

So why trumpet a plan that doesn't do anything? CongressDaily (no link) found the answer: "'Totally will sandbag the bankruptcy stuff,' one lobbyist said of the White House announcement." That's what the plan is designed to accomplish--kill off the bankruptcy proposal to deal with home mortgages.

In a piece entitled, "Bankers Hope Bush Subprime Plan Will Scuttle House Bill," CongressDaily reports that "the mortgage industry hopes a White House plan designed to aid subprime borrowers at risk of losing their houses will help scuttle congressional efforts to refashion mortgages through the bankruptcy code.

http://warrenreports.tpmcafe.com/blog/warrenreports/2007/dec/07/the_sandbag_plan

So Bush announces a plan that does nothing to stop anyone messing with the elite's stranglehold on the bankruptcy laws.

Sounds about right.

[JuniperLea]

1. Everyone knew this was going to happen

From BushCo, to the banks... this was planned and anyone who doesn't believe that is fooling themselves.

Who does this crisis benefit? This is a band-aid... these people will not be able to keep the homes they cannot afford. It's a harsh reality. They were pawns in a much larger game.

I'm waiting for a bunch of foreign investors to swoop in and buy up America. That's my guess for the next step.

[Catshrink]

4. Bailing out the mortgage industry?

Remember how brother Neil(?) cleaned up in the S&L mess? What Bush benefits with this "crisis."

[Robbien]

5. If the bankruptcy bill hadn't been changed, homeowners wouldn't

be hurting as bad as they are today. Under the old rules, homeowners could renegotiate with bankers and get the loan amount reduced to current market values. But under the new rules, bankers won't even take homeowners calls.

So yes, this was planned and the change in the Bankruptcy Bill was part of the plan.

[JuniperLea]

9. You are correct!

The change in bankruptcy laws was laid out for precisely this reason. That is a very important dot to connect!

[underpants]

2. "empty spectacle"

as Frank Rich of the NY Times has so aptly described these yahoos

[lonestarnot]

3. Because he likes to hear himself talk and give out wrong phone numbers. He thinks it's funny.

[Robbien]

6. That erroneous one eight hundred HOPE number

probably had Bush in stitches.

[lonestarnot]

8. In that he has stolen HOPE from so many, I bet he found it a killer.

[flashl]

7. Because we will all pretend we dont see a $50B per month reset of ARMs comming.

[JuniperLea]

10. Yep... and years after Bush has left office...

This was the only flaw in their plan... they needed to put the adjustment out another year.

[Generator]

11. Correction:

Bush's "people" are the have every-things. I just had to say that. And I learned a few years ago that if Bush is FOR it-it is either-probably both-evil and fucked up stupid. And it's not hyperbole! Show me anything that man can do that isn't self serving at best, and just plain truly evil at worst.

So when I saw this I knew it was for the bankers or wall street or some CHUM. He has never done one thing for a one American that isn't serving his interest.

[Robbien]

12. That is for certain. What puzzles me

is that people believed (and some still do) that above everything else Bush is an honest man.

Huh? Just cannot understand it.

[enid602]

13. Bushco

Bushco announced this paultry measure for the same reason Hoover initiated 'New Deal' lite measures during the last year of his Administration; it's a clear admission that the policies that have characterized his administration have failed. Bushco knows we're in for a rough ride.

[cliss]

14. It's a phony, make believe "solution" that will

accomplish absolutely nothing.

EVERYTHING about this administration is smoke and mirrors. It's all a hologram. Turn it sideways, and it's gone.

Same thing with this Teaser FReezer Yeah Right. As if.

[Captain Hilts]

15. Because homeowners have a VERY high voter turnout rate. nt

[ShaneGR]

16. There really isnt a way to reduce the amount of money they owe, interest is only possible fix

What I mean is, Joe Smith buys a house at 400,000. Two years later the house is worth less than $400,000 because of market decline.You can't force the bank to lose the depreciated value of the home, or else you're looking at mass bank failure with potentially hundreds of billions in lost income and the entire market collapses. That wouldn't help the economy, it would destroy it.

What could help is some sort of legislation that keeps interest on lost equity mortgage loans at a low rate, say 5%. as long as the buyer can prove a homestead is what I would imagine. Secondary investment buyers at a slightly higher rate, say 7%. Basically stop the bleeding on predatory lending, allow people at least a chance to hold on to their asset, and hope the market recovers within 5 years. Historically, the housing market should recover in about two years.

[Angela Shelley]

17. Because he had to try something