Comments on: Era of Responsability http://www.aleablog.com/era-of-responsabilty/ Alea Jacta Est Wed, 03 Mar 2010 18:43:34 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: jck http://www.aleablog.com/era-of-responsabilty/#comment-3290 jck Thu, 02 Jul 2009 07:27:15 +0000 http://www.aleablog.com/?p=3928#comment-3290 Economically, I agree, it doesn't amount to much. Just the principle of the whole thing, I find odd. Economically, I agree, it doesn’t amount to much. Just the principle of the whole thing, I find odd.

]]> By: David Merkel http://www.aleablog.com/era-of-responsabilty/#comment-3289 David Merkel Thu, 02 Jul 2009 04:05:47 +0000 http://www.aleablog.com/?p=3928#comment-3289 This is just a covert means of bailing out low end housing prices -- though, two things: 1) Refi at 125% of appraised should not lower many payments, at least not by much, and it doesn't solve the fundamental inversion of owing more than something is worth, and the incentives to give up after cash flow gets crushed by some disaster. 2) The low end doesn't need as much help now -- we haven't bottomed there yet, but the bottom is probably 10-15% below current prices. I don't think it will amount to that much aside from more losses for the GSEs. This is just a covert means of bailing out low end housing prices — though, two things:

1) Refi at 125% of appraised should not lower many payments, at least not by much, and it doesn’t solve the fundamental inversion of owing more than something is worth, and the incentives to give up after cash flow gets crushed by some disaster.

2) The low end doesn’t need as much help now — we haven’t bottomed there yet, but the bottom is probably 10-15% below current prices.

I don’t think it will amount to that much aside from more losses for the GSEs.

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