“Federal, state and local governments have launched initiative after initiative to save borrowers from foreclosure, leading many Americans to ask why some people should be rescued from the bad bets they made on the housing market while more cautious home buyers were left to absorb the full brunt of the collapse. The question is sure to be raised again in response to Friday’s announcement that the Obama administration will push lenders to reduce the amount that people owe on homes whose values have fallen to less than the amount of their mortgages. It’s easy to defend the rescues when they’re premised on voluntary decisions by banks to cut their losses. It’s more problematic to justify using tax dollars to persuade lenders to do something they should be doing anyway.”
“Federal, state and local governments have launched initiative after initiative to save borrowers from foreclosure, leading many Americans to ask why some people should be rescued from the bad bets they made on the housing market while more cautious home buyers were left to absorb the full brunt of the collapse. The question is sure to be raised again in response to Friday’s announcement that the Obama administration will push lenders to reduce the amount that people owe on homes whose values have fallen to less than the amount of their mortgages. It’s easy to defend the rescues when they’re premised on voluntary decisions by banks to cut their losses. It’s more problematic to justify using tax dollars to persuade lenders to do something they should be doing anyway.”