- Thread starter
- #61
You're all missing the point.
The loans are only for F/F paper. The reason Obama is proposing a new government program is probably because the existing paper has either prepayment penalty or some yield maintenance that prohibits it from being refied
The investors who bought the higher yield paper need to get paid off -- thats my guess. I havent seen the specifics.
Investors with higher yield paper would want to hold it for as long as possible. If paid off they will have to reinvest at lower rates. So that doesnt make sense.
The program doesnt seem to do much of anything, except allow Obama to say he is "doing something to help."