…Please stay out of our sandbox.” –XBroker commentary on the plan by lenders to offer help owners in danger of foreclosing.
My take posted at XBroker:
This is more bank bailout. The banks get to put a huge number of un-foreclosed but delinquent houses into the lifeline category. This give the banks another 30 day window to stall the inevitable foreclosure which would impair the capital on the balance sheet. By throwing these houses into Lifeline status, Treasury, FDIC, SEC are probably giving the banks a pass on the ENRON accounting that this entails. The lifeline also gives local governments another year of inflated property values for local taxes.
Question: What will they do when commercial, credit card and automobile CDO’s need a lifeline? Do we get to drive the car payment free on a lifeline? Do the unfinished condo towers, retail centers and apartment complexes get completed on a lifeline?
Could the lifeline be an election year scheme to stick the Democrats with the credit fallout? Could McCain be a Bob Dole candidate?