A Stimulus Proposal that Even Responsible, Non-Politically Connected Americans Can Love?
If there is going to be a major binge of stimulus spending in one form or another, and since Fannie Mae and Freddie Mac have already been taken over by the government anyway, doesn’t this stimulus proposal being put forth by Senate Republicans make a lot of sense, because it brings regular folks who have been spending responsibly and living within their means into the program…
Senate Minority Leader Mitch McConnell, R-Ky., told reporters Monday that Republicans would offer a plan to have the government step in to reduce mortgage rates to around 4 percent, which could shore up home prices and lower housing payments for millions of Americans.Yeas or nays, anyone?
“A stimulus bill must fix the main problem first, and that’s housing,” McConnell said. “That’s how all of this began. We think you ought to go right at housing first.”
Republicans want to have banks lower the interest rates to 4 percent or 4.5 percent on 30-year fixed rate loans, up to a certain cap. Rates could drop if Fannie Mae and Freddie Mac agreed to buy the mortgages.
The two companies were seized by the government in September, and have bought the majority of the new home loans issued over the past year because Wall Street’s appetite for mortgage securities has vanished. The new rates would be available through 2010 for both new purchases and refinanced loans.