Tag Archives: washington post

Chrysler Rejects Bailout

newdummyChrysler CEO “Test Dummy Bob” Nardelli (formerly known as Home Depot CEO “Builder Bob”) has signaled bold new initiatives to save the deeply troubled company. With sales even lower than forecast, Chrysler announced it would reject additional Federal TARP money as they don’t need to make or finance any new cars.

Rumors at Chrysler, suggest that may not be the only reason. Speaking on the condition of anonymity, insiders say Nardelli has signed an exclusive deal with the Republican party to sell a new, and potentially, brand-saving car to be named the “Tea Bag”. “The 2010 Chrysler Tea Bag is the perfect family car to push off a cliff (sic: or dump in a local bay),” said industry analysts on last night’s Fox news, “plus, it will have zero air pollution and get unlimited mileage while falling and that ought to please the liberal media.”

car_over_cliffTechnically, the Tea Bag will only require putting a new logo on already manufactured Chryslers. Restructuring plans call for firing remaining union workers and use executives to put the new Tea Bag logos on their existing inventory of cars.

In a conflicting report, The Washington Post reported today that Chrysler is rejecting the bailout because its top executives refused to sign an agreement limiting executive compensation as they prepare to negotiate union concessions.


Finally, a Path Forward on Foreclosures

According to the Washington Post, the Obama administration’s homeowner plan will be announced today:

President Obama will unveil today a $75 billion foreclosure prevention program, which the administration expects to reach up to 9 million homeowners.

“The plan I’m announcing focuses on rescuing families who have played by the rules and acted responsibly: by refinancing loans for millions of families in traditional mortgages who are underwater or close to it,” Obama will say at a speech in Mesa, Ariz., according to an advance text released by the White House.

The Homeowner Affordability and Stability Plan includes measures to allow homeowners to refinance into loans with cheaper payments, according to a summary of the plan. For example, if a lender agrees to lower a borrower’s payment so that it comprises no more than 38 percent of his income, the government would pay to lower the payments further to 31 percent of income. The aim would be to make the payments affordable.

The plan offers incentives for lenders that modify troubled loans, with up to $1,000 for each modification and then another monthly “pay for success” fee as long as the borrower stays current, according to the summary. If the lender reaches an at-risk homeowner before they miss a payment and modifies their loan, the lender would be eligible for another incentive payment.

Homeowners will also be eligible for incentive payments. Those that stay current on their loans could qualify for a “monthly balance reduction payment that goes straight towards reducing the principal balance of the mortgage loan,” according to the summary. The homeowner could receive up to $1,000 a year for five years.

The Obama plan does not include provisions to help investors and is focused solely on owner-occupied homes. Officials said the administration is trying to provide enough help to stem foreclosures while not rewarding borrowers who purposefully stop paying. At the same time, Obama’s team wanted to risk only as much taxpayer money as absolutely necessary.

The plan “will not rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans,” Obama will say, according to the text of his speech.

The administration estimates that the plan could stop the slide in home prices by up to $6,000 per home, simply by reducing foreclosures. “The effects of this crisis have also reverberated across the financial markets. When the housing market collapsed, so did the availability of credit on which our economy depends,” Obama says in the prepared text. “As that credit has dried up, it has been harder for families to find affordable loans to purchase a car or pay tuition and harder for businesses to secure the capital they need to expand and create jobs.”

Other sources: Politico, HuffPo