Mortgage Miasma

For those who are curious here’s a link to the official text of the Prez’s announcement on Thursday regarding mortgage loans and foreclosures. For obvious reasons the media’s reporting of these items is and will continue to be so agenda-driven as to be useless.

Here’s a synopsis and quick analysis of the administration’s key points:

1. Unilateral rate freeze re: ARM loans

Unnecessary and partially self-defeating dog-and-pony show.

As stated previously this move will do little but to delay by at least 1-2 years the final bottoming out of the housing market. Then again, a private and unilateral rate freeze brokered by the Treasury Dept. and HUD is a much more palatable scenario than the ghastly nanny state legislation circulating in the media/Democrat Congress. Private agreements are one thing. Laws are something else entirely.

2. Expanded FHA loans

Bad move. That’s a public-money loan insurance program. The less of that the better.

3. Expanded loan disclosure requirements

Very bad move. More government isn’t the answer. If people can’t read and understand a legal document germane to the biggest purchase of their lives they deserve to get tossed out onto the streets.

4. Tax relief for mortgage borrowers

Very good. For obvious reasons.

5. Public-money mortgage counseling

Very bad. For obvious reasons.

6. Legislative reforms re: Fannie Mae and Freddie Mac

Bad move. Those are government-sponsored money vehicles. The less of Fannie and Freddie the better. The private sector can provide its own liquidity for mortgage loans.

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