Sources Said That The Plan Is Almost Ready And Just Needs Some Final Brush Up

Category: Finance.

The U. The Department will work out this plan with the collaboration of mortgage industry leaders.

S Treasury Department is going to come up with a plan that will save all homeowners who are struggling from the foreclosure syndrome. But the analysts have something else to say. Sources said that the plan is almost ready and just needs some final brush up. They think that this plan cannot help the banks to survive from the pain of home loan. If everything goes right then the details will be announced on Wednesday. This rise proves that the Government is aware of the problems of the mortgage and housing market.

The Philadelphia KBW Bank Index, BKX hiked 1 percent on Friday. Chairman of Soifer Consulting, Mr. In this market the foreclosures are increasing and the home prices are falling. Ray Soifer also confirmed the previous statement. As far as the sub prime loans are concerned they are also facing a problem. But it goes up after two or three years.

In this loan, the teaser rates initially stay low. The new plan will help to freeze the interest rate of the borrower before the rate becomes higher. But the loans need to be written down because they will not able always be able to return the expected amount. There are some analysts who think that if the terms of loan are renegotiated then it will just postpone the writing off process for such loans. The Chief strategist of Sandler O Neil& Partners in New York Mr. The analysts said that the treasury hoped that bank could prevent the writing down of excessive mortgage related assets in the time of acceleration of the economic growth of other sectors. Robert Albertson said that, if a bank wanted a higher rate in a longer term, then it would not get it a teaser rate.

This will allow the banks to produce profits in a higher level. Mark Batty said that if the income of the borrower increases, then the borrowers can be in a position where they can fight with the up growing interest rates. Financial Services Analyst of PNC Wealth Management in Philadelphia Mr. The shares of Wells Fargo& Co rose almost 7% to$ 34Countrywide Financial Corp shares rose 13% to$ 18These two banks are in a talking term with the treasury. Portfolio Manager of Hedge Fund Trident Investment Management Mr. Some investors consider the above scenario too much optimistic. Nandu Narayanan said that postponing the inevitable situation can only drag the pain on for a longer time.

They think that there will be a whole lot of inappropriate proposals before finally settling down with the right one. Some other people like Mike Holland, and Albertson think that this new plan of treasury department though promising, can have some bad effects as well. But most of the analysts think that this proposal can be a big help towards dealing with the crisis at hand. Batty thinks that giving the proposal a chance is better than doing nothing. Mr.

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