"Ara Hovnanian, CEO of K. Hovnanian Homes, suggested to Bloomberg TV that interest rates should be temporarily slashed to three percent on 30-year fixed-rate mortgages in 2009. The rate would then rise to four percent in 2010, though it’s unclear what would happen after that."
Surely not on new mortgages?! Please click on below to see the "hole" post at TheTruthAboutMortgage blog.
Isn’t this what got us into trouble at the beginning? 
By the way, hat tip to the Implode-O-Gang for digging up the post. I’m not sure they or the original authors realized just how egregious this marketing idea is, but Igor wasn’t fooled: "Outraged!"
I’m at 5.75, missed my chance at 5.5 because I was mowing my lawn when the phone rang and should have just said, yeah lock it. Greedy bankers who apparently own our government, would laugh all day long at this suggestion.
Is this a good idea to keep people in homes, and free up disposable income to help keep the economy rolling?, and will it shore up home prices? sure it will.
But, remember, that immense capitalistic greed rules this country.
Will the bankers ever figure out that keeping people in homes, keeps money flowing to them, shores up the prices, and lowers defaults?
The banksters are naive and dumb, they don’t see real people living real lives, they just see dollar signs.
Dropping rates that low would decimate banksters profits, their is just no way.
Uh… I think I read that differently than you.
I think he means that they’d actually be 3% fixed loans. And that if you didn’t take advantage of that, it would be higher the following year.
It’s actually not a bad idea if it’s along with stringent underwriting. We’d probably make more money than with our $700B bailout.
The USG can be the lender of last resort. Everyone would refinance if they could to the new rates. It would free up a lot of pent up demand.
Chuck Ponzi
Chuck -
Perhaps you’re right. But if you’ve parsed Hovnanian correctly it opens some other issues. Yesterday’s Fannie bill sales themselves got yields around 3 percent. I think we’d be talking about a sovereign takeover of the entire mortgage finance sector.
I’d agree about the takeover of the mortgage finance sector… who ever said it needed to be free enterprise?
Remember, we’re now in the USSA. Everything are belong to us.
good question to debate, though… which is more evil, US Government or US Finance Corporations?
Chuck Ponzi
PS Igor says “concerned”. There are often unintended consequences when government crowds out free enterprise. But, then again, roads, schools, and protection services are “taken over” by the government. In addition, public health services are highly regulated or public owned. How do we naturally draw the line? Perhaps government SHOULD be the main housing finance lender. That’s a debate worth having, as I am sure I could argue either side.
I was happy to see this suggestion somehow somewhere, I’ve made it more than once in my blog replies, and so have others I’m sure, it was so long ago I gave up on the idea. The most recent creativity of the banksters does not give me much hope.
“Ara Hovnanian, CEO of K. Hovnanian Homes, suggested to Bloomberg TV that interest rates should be temporarily slashed to three percent on 30-year fixed-rate mortgages in 2009.
The rate would then rise to four percent in 2010, though it’s unclear what would happen after that.
Hovnanian called the crisis a “problem of supply and demand,” which he believes can be solved by making homes affordable to everyone.”
Um. Ok. Problem of supply and demand, eh? Let me go waaay back to my Econ101 class, where I think they mentioned something about supply vs. demand. I’m not too bright, but lemme see if I can summarize:
Too little inventory for demand, prices go up.
Too little demand for inventory, prices go down.
How about the completely quite building houses, and drastically slash prices to clear out inventory?