Friday, February 20, 2009

Perverse Incentives in Obama's Housing Plan

The evidence is coming in immediately for the perverse market effects of President Barack Obama's mortgage-relief plan. Check out the guy below, who's facing foreclosure, and with the announcement of the Obama plan, his mortgage company is "barrreling full-force to take me out of this house":

I wrote about the inherent inequities in the mortgage-bailout plan yesterday (lots of folks "underwater" who continue to pay the bills will get no relief). Not only that, the administration may very well be saving untold numbers of borrowers who were untruthful in their original mortgage applications; and further, the mortgage "cram-down" provisions could "would jeopardize the endangered capital of banks, pension funds and other holders of such securities, including the Federal Reserve, Fannie Mae and Freddie Mac."

As regular readers know,
I'm interested to see how all of this turns out, so stay tuned ...

**********

The iReport link is here. It's tough to watch this guy, but be sure to read the comments for a flavor of the social divisions caused by any housing bailout.

0 comments: