US to help homeowners

There are welcome reports this morning that the US government is finally putting in place measure to help homeowners in danger of foreclosure. The FDIC (Federal Deposit Insurance Corp) has developed guidelines that will “lower a loan’s interest rate, extend the life of the loan or defer payment on a portion of the principal”. The aim is to reduce monthly mortgage payments to a max 38% of the borrower’s pre-tax income.

The blog welcomes this move, as it should help to keep people in homes, and avoid more neighbourhoods being devastated by foreclosures. Unfortunately, though it is a “fix” and not a solution to the housing crisis. It is unlikely to kick-start demand for new homes once more, and the revised borrowing terms will put more pressure on lenders. So it will do little to stimulate chemical/polymer demand in this important sector.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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