CNBC reporter reacts negatively to housing proposal

Jeff Poor of the Business & Media Institute writes Saturday that a CNBC business journalist reacted negatively to President Bush’s proposal to aid homeowners who took out risky subprime mortgages, reporting that it’s not enough.

Poor wrote, ” ‘[I] don’t know how big of a helping hand it was when you’re talking about two million homeowners who are facing adjustable rate mortgages resetting over the next couple of years,’ said real estate reporter Diana Olick on the August 31 CNBC’s ‘The Call.’ ‘Now the only thing he actually said in his speech that would have a real effect today is that FHA [Federal Housing Administration] change in the program. And remember, FHA can only back mortgages up to about $362,000, so there’s your limitation right there on those type of loans.'”

Later, he noted, “Nonetheless, the move is still historic as Noelle Knox pointed out in the August 31 issue of USA Today. It represents an expansion of the role of the FHA – from a government bureaucracy that has traditionally helped low- and moderate-income families and first-time home buyers to one helping delinquent borrowers. Yet, Olick pointed out those who irresponsibly bought a home with a subprime mortgage aren’t getting government help.

“‘Now for the people he can help, the administration is saying itself that it is only for credit-worthy borrowers. Now remember, a subprime borrower is defined as a person who has little to no credit, so it’s questionable in this, ahh – speech how much subprime borrowers are really going to fall into this new program.'”

Read more here.