Last week, much of the media fawned over the president'sfirst 100 days in office to such a degree it's a wonder outlets such as the NewYork Times or MSNBC did not require its reporters to don drool bibs.
As most of you have surmised from my past writings, I'mnot quite as star struck, and had his predecessor made half the missteps thatin my opinion Obama has, the critical headlines would have been blared in50-point type. Last week's unannounced flyover in Lower Manhattan and GroundZero, which sent thousands of workers scrambling from their offices fearful ofa 9-11 replay, is but one example of favored son treatment. I can't imagine thewidespread coverage had this happened six months ago.
But that's fodder for a future column.
No, buried amongst the rose petals was a quiet proposalto expand the administration's plan to stem home foreclosures.This time however, it will help thosewith second mortgages or "piggyback" loans.
Like the first plan, it offered cash incentives and othersubsidies to lenders , who agree to substantially reduce the required monthlypayments on second mortgages or in some cases forgive the loans altogether.
Depending on which statistics you read, roughly 4 millionhomeowners are facing foreclosure - nearly double the amount from the prioryear. According to the Obama administration about half of those 4 million havesecond mortgages.
The rationale behind the second mortgage measure is thatwhen facing foreclosure the second mortgage has to be negotiated separately.
Under this new measure, which, ahem, is slated to be paidfor by the original $50 billion from the TARP funds earmarked for homeownerbailouts, lenders who come on board will OK a formula that would slash secondmortgage payments upon modification of the first mortgage loan.
To help elicit lender participation, the Treasury willoffering a cash incentive of $500 for each modified second loan as well as $250in additional payments for three years if the borrower stays current. Accordingto reports, the Treasury will also help ease the lenders' cost of reducing themonthly payments.
My problem with this plan is the same as when the firsthomeowner bailout was announced, when the administration began preliminarydeterminations of who was a responsible homeowner who has trouble paying theirmortgages and needs help, and those who were clearly irresponsible and had nopossible avenue in which to meet their loan obligations.
I also have a problem with the proposition that thesecond mortgage annex would also be financed from the $50 billion, as estimateshave projected that the price tag for the original mortgage bailout could scaleas high as $275 billion.
The first 100 days in what has rapidly become BailoutNation has been nothing if not interesting.
My guess is that it will become a lot more expensive onourend in the months to come.
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