Upside Down Mortgage

Subprime Refinance

Question: What does this mean?

This is an exerpt from an article on cnn.com. I am wondering what it means. I will post the link for the full article as well."Lastly, Bush said he would like to allow state housing agencies to issue tax-free municipal bonds to subsidize the cost of mortgage refinancing for subprime borrowers trying to get out of unaffordable loans. The governments use the revenue derived from the sale of the bonds to help subsidize the cost to consumers of certain types of mortgages they get from private lenders."

http://money.cnn.com/2008/01/28/news/economy/sotu_final/index.htm?postversion=2008012822

Ok, what ARE these bonds? Are they purchased by people like me and you or are they purchased by mortgage companies? How do they work? How much do they cost? How does it help me to refinance my house? i am clueless.

Answer: State governments can issue bonds, with no federal tax on them, to raise money which can be used to help sub-prime borrowers, refinance their mortgages. In other words, another subsidy to assist his rich mates suck the poor into mortgages they can't afford.

Subprime Refinance Mess

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