Bush Mortgage bailout pledge gets cool reception in L.A.

The L.A. Daily News reports:

President George W. Bush's pledge to rescue some homeowners from foreclosure rallied Wall Street on Friday, but got a cooler reception from Los Angeles County borrowers who might owe too much to benefit from federal assistance.

Bush's proposal would let delinquent borrowers with good credit histories lower their monthly payments by refinancing into mortgages insured by the Federal Housing Administration.

But the FHA doesn't insure loans over $362,790, and even if Bush increases that limit to $417,000 as planned, many Southern California homeowners owe much more than that.

For example, the median home price in Los Angeles County is about $545,000 and many recent buyers arranged 100 percent financing to pay for their homes.

It's pretty absurd that some local officials want the federal government to prop up overpriced real estate.How do you know it's overpriced? When "many recent buyers" arranged for 100% financing.That's how you know.