Global stocks got a boost early this week from President Bush’s plan to throw a rescue line to some Americans in danger of losing their homes to foreclosure. Bush on Friday proposed making Federal Housing Administration-insured refinancing available to more people with subprime mortgages to help them avoid defaulting on their loans.
Bush’s plan is “too little, too late” for investors who stand to lose big in the mortgage mess, said Al Yoon in Reuters.com. The meltdown of the market for risky, subprime loans to people with shaky credit could send 1.4 million loans into default, and Bush is talking about helping 80,000 more people refinance.
Sure, the bailout won’t help everybody, said The Oklahoman in an editorial, but it’s the “right approach.” Bush is aiming to help families that are struggling to make their payments, not speculators who were looking to make a quick fortune during the real estate boom. “In the current crunch government can and should distinguish between real victims and those who were unscrupulous or foolhardy.”
There’s a reason that polls show that 70 percent of Americans oppose a subprime bailout, said Peter Viles in the Los Angeles Times (free registration required). “Many or most of them saw this crisis coming years ago,” as and dodgy financing schemes drove home prices throught the roof. No wonder they’re now “furious” that politicians seem to be throwing “a pity party for the very buyers who priced them out of the market.”