Paulson Weasels Out of Fixing a Crooked Deal
Paulson Outlines Mortgage Aid Plan Proposal Would Expand Help At Local Level
By David Cho and Neil Irwin Washington Post Staff Writers Tuesday, December 4, 2007; A01
Treasury Secretary Henry M. Paulson Jr. unveiled new details of the Bush administration's mortgage-relief plan yesterday, including a proposal that would grant new powers to local governments to refinance the mortgages of struggling homeowners.
. . . The worst slumps are in California, Florida, Nevada and parts of the Washington region, especially Northern Virginia, Zandi said. Most of those areas have seen at least a 7 percent decline in housing prices from the beginning of the summer, he said, adding that a 20 percent decline overall is likely by early 2009.
. . . The major sticking point is the investors who buy securities made up of subprime loans. For years, they provided the financial backing that allowed mortgage firms to expand their lending. No type of loan made more money for investors, or was as risky, as subprime …