Thursday, February 12, 2009
Government Considering Buying Up Bad Alt-A Mortgages
The government is considering buying up millions of the mortgages itself, and then allowing the homeowners to refinance on better terms.
Given that the coming tidal wave of Alt-A mortgage defaults could be devastating to our already-depressed economy, I'm not opposed to the idea.
Of course, America is broke, and we don't have the money.
On the other hand, the funds would come from money already approved by Congress for the bailout, and would not represent new commitments.
It's smarter than most of the idiotic things the government is doing with taxpayer money. At least it would actually help some people, and might help to mitigate one of the many sources of the crisis.
True, it rewards those that made poor decisions, and penalizes the rest of us. But if the government insists on skinning the taxpayers to give bailouts, at least it may be a better use of money than, say, forking it over to wealthy bankers.
Update: Mish slams the proposal.
2 comments:
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Good points.
ReplyDeleteOh. Hmmmm. (Read the update.)
ReplyDeleteHere's the thing. The cost of homes will come down as the market collapses due to foreclosures. The prices get low enough, the homes will sell.
Our grandparents never went into debt. If we just let the chips fall where they may, what would happen?? The main thing to me is I don't want to see foreigners able to buy US properties. That kind of protectionist laws I'm for.
Other than that, well, markets really do correct themselves if left alone. If we just let the collapse happen, the prices of homes -- wouldn't they be forced downward in order to sell them?? And wouldn't that be good for people who just are not making the money we used to make as a nation?? The working poor??
I mean, if a person who is working at minimum wage - two people - if they could buy a house and afford it because the prices were so low -- isn't that how it should be??
I wonder what would happen if the Government would stay out of the whole thing.