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President Politics And The Subprime Debacle

By
Real Estate Agent with Buyers Brokers Only, LLC

Even presidential candidates can't avoid weighing in on the subprime lending debacle (also know as the people-who-never-should-have-ask-for-or-received-a-loan-in-the-first-place problem).

Don't get me wrong. Many people were taken advantage of by less-than-ethical mortgage brokers, but not everybody, and the foreclosure crisis isn't just the result of subprime lending. A lot of homeowners took every last penny of equity out their homes. Then prices dropped: Game over!

Boston Globe Real Estate Editor Andrew Caffrey posted information on the Globe's real estate blog August 8, 2007 from a Senator Hillary Clinton press release that outlines her plans "to crack down on unscrupulous lending and offer assistance to troubled homeowners facing foreclosure."

Of course, the plan provides for a $1 billion taxpayer bailout to assist homeowners facing foreclosure. The money would be provided to states, which would then use the money for state-sponsored programs.

The plan also calls for the elimination of home loans with pre-payment penalties. The release sites an interesting statistic. "Studies have shown that loans with prepayment penalties have a 52% greater risk of default than those without."

Read Senator Hillary Clinton's press release.

Listen to Senator Hilary Clinton speak on this topic.

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