Following the Balloon

In this report, we assess the prospects for the trial balloon launched yesterday by the Administration in the Wall Street Journal. The report floated what many call HARP 3.0 – that is, a new effort to refinance under-water borrowers out of PLS and into the arms of what the blog site Naked Capitalism appropriately calls the “stuffees,” i.e., Fannie and Freddie. Because the plan requires a charter change to fly, we think its prospects slim. But, it might score well and, thus, stand a better chance. Regardless, it points to both the politics and policy of the GSE debate sure to come early next year.

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