SocraticGadfly: Pounding sand down the subprime rathole

December 09, 2008

Pounding sand down the subprime rathole

Half of home mortgage refis still default

Given that, despite some neolib economic types on Keynesian steroids, half of mortgages refinanced earlier this year defaulted within six months, should be be more careful with whom we make eligible for loan modification programs?

Many shady loans were taken out by would-be flippers, or "investment income" buyers.

Guess what, folks? You bought a $500K or $5Mil stock portfolio, only yours is a physical property covering 4K square feet. Deal with it.

At the same time, are there people who either didn't have the money, or else didn't have the fiscal discipline or acumen, to be buying a house in the first place?

Republicans did go overboard with their Fannie Mae/Freddie Mac bashing, and the attacks on the Community Reinvestment Act had no connection to reality.

That said, they were right that a lot of loans were pushed on people who shouldn't have had them in the first place.

In all of the above cases, two blank checks don't make a right.

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