President Bush chimed in today and is talking about a plan to help diminish the effects of the "Great Mortgage Debacle of 07". Imagine that!
I had commented on a post on Activerain by Jay Beckingham yesterday regarding his belief that there will be no replacement for the subprime mortgage. I had suggested that upon further review and analysis, investors will recreate and deliver a new set of subprime mortgage vehicles that will perform. When I wrote that post I imagined that these new sub prime mortgages would start to show up in 3-6 months. Now I am even more confident that we will see a new set of mortgage products aimed at the sub prime borrowers because now, our president is getting into the mix. For more about Bush's plan, you can read the AP article, Bush Outlines Aid for Mortgage Holders. I'm not sure exactly how this will help home buyers but it is definitely something that needs to happen to help keep a lid on the foreclosure rate.
Mark my words, we will see a re-emergence of the subprime category in the mortgage industry in the near future, 3-6 months, but it will definitely be more conservative than the flimflam of the past 5 years.
Thanks Mr. president, now maybe Wall street can have a good day.
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