Government Expanded Bailout To Cost 0 Billion

Government Expanded Bailout To Cost $700 Billion

September 21st, 2008 by Jake

In what many have considered one of the largest transfers of debt in the history of the world, plans continue for a $700 billion bailout by the federal government. The plan calls for funds to buy bad mortgage debt, which could have an even more immediate effect on home owners around the North Shore than the previously announced bailout of Fannie Mae and Freddie Mac.

It is hoped that the purchase of bad debt on company books around the nation could work to reactivate the credit market. Credit markets came to a virtual standstill last week as Lehman Brothers announced its bankruptcy and the federal government stepped in to save AIG, the nation’s largest insurer.

Buying up bad mortgage debt could give a lifeline to homeowners in trouble. However, details surrounding the terms for refinancing have not yet been confirmed by the Bush Administration. One guaranteed result is that many businesses that thrived on poor management and risky investments will also be given a new lease on life. There is no doubt that this issue will be hotly debated both in Congress and on the campaign trail in coming weeks. The effect of such a bailout remains to be seen for the North Shore Chicago Real Estate market.

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