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Paying for Subprime

By
Services for Real Estate Pros with Business Attorney and Success Advisor

This article from CNNMoney.com puts forward some good arguments why a bailout of the subprime mess isn't such a good idea (at least a taxpayer funded bailout).  Here's a pretty good summary of the whole issue:  "While the subprime market has witnessed considerable stress, the losses in that market are being borne by investors. Were these same losses to occur in FHA programs, it is likely they would be borne by the taxpayer," said Richard Shelby (R-AL), ranking member on the Senate Banking Committee, in a July hearing.

As the article points out, FHA loans are not insured directly by taxpayers, but if FHA tries too hard to rescue too many (i.e., makes too many risky loans), then increased defaults and foreclosures necessarily will come back to hit the taxpayers where it hurts the most...the wallet or purse. 

Here's the full article:  http://money.cnn.com/2007/10/22/real_estate/bailout_cost/index.htm 

What do you think...is a taxpayer-funded bailout the way to restore stability to this market (do you even think the FHA solution poses risk to taxpayers in general)?  Would you like to be one of the taxpayers in Ohio or Massachusetts (see article for details)?

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