Home Loan Focus

I just listened to Treasury Secretary Geithner give the much anticipated ‘Comprehensive Plan’ for the bailout (2.0) of the mortgage and financial sector.

Below is an outline of the high points taken live during the speech.  They can be analyzed and corrected as text copies come out, but I wanted to share this right away.

At a high level the plan will cost $1 trillion (this is on top of the previous $800 billion spent and the current bailout bill of $800 billion, so we are talking $2.6 trillion mentioned, even though the costs of the first bailout actually tallied up closer to $2 trillion all by itself.  If we consider the interest on that spend and apply that to this one, within 3 months the combined two plans will have cost us $6 trillion and growing rapidly!)

NO PLAN FOR MORTGAGES AND REAL ESTATE

So the most important aspect of this plan is that it actually is NOT COMPREHENSIVE.  To show you how obviously it misses the point, it has no housing and foreclosure relief plan yet. 

He plans to make that plan for housing and foreclosure.  My question, is why in the world did he not build this plan already.

Wall Street is down 305 points for the day and 215 points since the speech started because there are NO details in the plan.

• Treasury, FDIC, Federal Reserve will work together and sit down together to figure out and model the problems at the banks
• Prepared to commit up to $1 trillion dollars – $500 billion out of the gate
• New framework of oversight
• Americans will see where tax dollars are going
• returns on investment
• how it is spent at banks that receive investments
• financialstability.gov
• 3 New Programs to strengthen Banks
• require banking institutions to go through stress tests
• get cleaner & stronger balance sheets
• bring together all agencies over banks
• assess their potential to suceed
• Establish a Public-Private Investment fund
• provide financing that private markets cannot provide
• private capital and private financial managers will price this out
• THEY  ARE STILL DESIGNING THIS PROGRAM
• WILL START WITH $500 BILLION
• Trying to kick start consumer lending
• Built on Federal Reserve’s Asset Backed Loan Program from last fall
• student loans
• consumer loans
• auto finance
• make it easier for small businesses easier to get loans
• Comprehensive Home Owner Plan
• “our government should have moved more forcefully to contain damage”
• Details to be announced in the next few weeks
• Goal
• bring down mortgage interest rates
• bring down payments

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