St. Louis CofCC Blog

Wall Street Journal:

Bush to Unveil Aid to Homeowners

WASHINGTON — President Bush is set to announce a plan to help struggling homeowners avoid losing their properties, including a temporary freeze on low, introductory mortgage-interest rates that would otherwise jump higher in the next few years.

The plan, expected to be announced today, seeks to combat a rising tide of foreclosures by making it easier for lenders to freeze the “starter” interest rate for certain borrowers for five years, according to a document being circulated by the Treasury Department.

As this medium has stated a number of times before, the subprime mortgage crunch is largely, but not entirely, a racial issue.  Mortgages with ridiculously low “introductory rates” on top of low ARM rates within the context of a low-rate climate is how many blacks and other non-whites were able to afford houses, and therefore this is the reason why President Bush was able to gloat about the “record home-ownership rate” among American blacks.  Never mind the fact that it was all built on gullible suckers that easily fall prey for snake oil without reading one word of the fine print, and built on those who have no idea that if 2.95% sounds too good to be true, it probably is.

And why only subprime borrowers?  Why not help those who lost their jobs who had sense enough to finance a mortgage with fixed rates?  And why only houses?  Many furniture stores have “no interest for a year” deals, but that means after you have made a year’s worth of payments, your next payment will include the interest — if you can’t afford the increased payments, and the repo truck stops by to take the furniture back, then tough cookies.  There’s no President Bush, HRC, Pelosi, et al. to help you.

Why only subprime borrowers?  The answer is in this post — it has to do with race.  Not only does President Bush want to maintain the “record minority home ownership” fiction, the NAACP and other “civil rights groups” would be screaming at the sky about “disparate impact” of foreclosures, and how the big bad evil white banks “tricked” blacks and other non-whites into agreeing to these snake oil mortgages, if no “relief” actions are taken.  (In fact, they already are).  Of course, if the banks and loan officers would have explained the situation, the NAACP et al. would have complained about “suppressing credit” and “denying credit to blacks.”