The Patrick Administration is exploring a massive, state-backed bailout of homeowners saddled with risky subprime mortgages as foreclosure rates go through the roof, according to executives briefed on the plans.
Administration officials are exploring plans to create a loan pool for struggling homeowners, who would be offered fixed-rate mortgages at market or below-market rates, according to Thomas Callahan, head of the Massachusetts Affordable Housing Alliance, who has had discussions with MassHousing, a quasi-state authority, about the plan.
You know, I may not be an expert on this, but I know enough to wonder a couple things:
* Isn’t it a bit soon to start talking about dollar amounts and bailouts, considering the subprime lending issue hasn’t even been an issue for more than several months?
* Shouldn’t the state government wait to see what the federal government offers up in way of cash, assistance, etc.?
* MassHousing is going to help administer this project – wait, aren’t they the same organization that loaned money to these subprime borrowers, to begin with?
* Who are the people who are at risk of foreclosure? The Boston newspapers keep talking about “predatory loans”, but a good number of subprime loans were made to well-educated people who knew what they were doing, knew the risks, but took out the loans, anyway.
* Is foreclosure an issue best left to be dealt with between a lender and a borrower? Why does the state need to be involved, at all?
Is anyone else asking these questions?
Does anyone really care?
State subprime bailout – By Scott Van Voorhis and Jay Fitzgerald, The Boston Herald
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