Hillary Clinton’s Plan to solve housing crisis: freeze interest rates
KSBY 6 Action News, Weather, Sports: Covering California’s Central Coast | Action News’ exclusive interview with Senator Hillary Clinton
On a day it counts most, when voters hit the polls, Senator Clinton makes one last pitch, touching on issues like the housing crisis.I asked Senator Clinton, “As President, what would you do to make housing more affordable in California?”
The senator’s answer was, “Well, I’m the only candidate in either party who has a specific plan. I will have a moratorium on home foreclosures for 90 days to help people work out staying in their homes, and I would freeze interest rates for five years.”
She forgot to say… “And pass an executive order that declares that the Bay Area is special… and to direct federal money to ensure all houses sold in the Bay Area are sold at a profit.”
February 6th, 2008 at 9:00 pm
Hillary is saying anything and everything just to get elected. She does not realize how stupid her plan is. She is no different from Bush.
From http://tinyurl.com/ytwtmq
Barack Obama articulated a key point regarding housing in tonight’s Democratic debate. He said that if you freeze interest rates as Hillary wants to in order to “protect” homeowners, you’d actually punish others by raising their interest rates.
This is a fact that everyone in the mortgage/econo blogosphere knows…..if you fix prices, the market will break down. Banks will lose money on troubled/distressed/irresponsible borrowers whose interest rates are protected and will make up the difference by overcharging everyone else. Interest rates will increase overall, compounding our housing problems.
So I’m glad at least one of the Democratic candidates can articulate a basic understanding of the economic forces at play here.
February 6th, 2008 at 9:10 pm
And that’s why California went for Hillary.
Californians know what’s the priorities are. Just look at Prop 13.
February 6th, 2008 at 9:30 pm
So …… rates are headed down, but Hitlery wants to freeze ‘em to protect her banker buddies?
So while the rate may go down to Ben’s goal of 3%, Hitlery wants to freeze homedebtors’ rates at 5-6-7%
And somewhere a banker smiles…..
February 6th, 2008 at 10:14 pm
Thanks burbed for pointing this out. This is quite identical to Prop 13. You just need to replace the property tax rate with mortgage interest rate. That will make it harder for a future buyer to buy home, in both ways.
February 6th, 2008 at 11:53 pm
Enough of the bail-outs. How are the renters on this site going to realize their dream of a market downturn if the politicians use every way they can to keep the existing owners in their houses??
We need foreclosures, recession, follow by an earthquake to shake the excesses out of the system!
February 7th, 2008 at 10:29 am
I think I’m going to submit a Proposition that housing prices need to go up 10% a year and that it’s illegal to sell a house for less than that.
February 7th, 2008 at 10:32 am
That was the premise behind Prop 1313.
See this:
http://www.burbed.com/2007/05/26/college-grads-fleeing-california-how-can-we-tax-them/
February 7th, 2008 at 10:41 am
I think by “freeze” she means the teaser rates that were offered at the time of buying the property. Remember the 0 down,no income verification, negatively amortizing option ARMs which made you buy the really spacious 2/1 743 sq. ft. home in Redwood City for $743k?
February 7th, 2008 at 10:42 am
I agree with RealEstater, let the free market (and an earthquake) manage things.
February 7th, 2008 at 1:48 pm
>> How are the renters on this site going to realize their dream of a market downturn if the politicians use every way they can to keep the existing owners in their houses??
Housing market is/will not (be) decided by the existing owners can (or will be able to) keep their houses. It is (and will be) decided by who are willing to sell their houses and will sell their houses successfully.
Of course, there are people who want to keep their houses but won’t be able to. They will just make the downturn faster. But they are not the root cause of this downturn. The root cause is affordability.
February 7th, 2008 at 2:29 pm
I think Prop 1313 could work. We need to call it an exit “fee” not “tax.” Then it’s as good as gold.
February 8th, 2008 at 12:57 pm
She is just paying lip service to the voters. Like most politicians, she is an opportunist and she saw and opportunity to garner some additional votes and she took it.
Do you honestly think she would follow through on a promise to freeze interest rates? That would be disasterous to the broader economy. For every interest rate you freeze, another newly issued loan would have to have a higher rate to compensate. Not to mention all the collateral contracts that would have to be revamped to accomodate the lower rate. Remember, most of these were low “teaser” rates that got people into their homes. Some as low as 1%. Banks would quickly go insolvement if they lended at 1% while having to borrow at 3% from the Fed.
Ultimately, its just political smoke and mirrors. If anything, her plan would increase the rate of the housing downturn since all new loans would have substantially higher rates associated with them and be much more difficult to acquire.