Clusterstock is reporting Obama Offers Bailout To Homeowners Deep Underwater
Obama is expanding the homeowner bailout so that underwater homeowners with a 125% LTV ratio can refi more easily through Fannie and Freddie.
Before your LTV ratio could only be 105%, because, well, as we've learned, fat loans relative to value are more likely to go bad.
As many have described it, Obama's solution to the housing crisis is: more subprime loans.
Like the original subprime loans, they're really only going to work out if home prices grow rapidly over the next few years, otherwise you're looking at the perpetuation of people living underwater in their homes.
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