A Bush bailout, in baby steps

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Another must-read tonight from the New York Times, under the headline, ‘Step by Step, Bush and Fed Move on Mortgage Rescue.’ The article tallies up all the steps the administration has taken to prop up the mortgage and housing markets, and argues convincingly, ‘However much they might oppose it on ideological grounds, the Bush administration and the Federal Reserve are inching closer toward a government rescue of distressed homeowners and mortgage lenders.’

The story reports it is possible Fannie Mae and Freddie Mac will soon be buying ‘liar loans’ made last year: ‘The two companies are now trying to decide how to guarantee the bigger and potentially riskier mortgages. Both want to exclude ‘no-documentation’ loans, but Congress authorized them to buy up big mortgages going back to last July — when a high percentage of such loans were approved without verification of the borrower’s income. As a result, company executives are debating whether to buy up at least some ‘no-doc’ loans made last year.’

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Hat tip: PJ via e-mail.