Help the Victim or Punish the Thief? Housing Solutions Get It Mostly Wrong
Foreclosure Aid Hinges on Eligibility, How Many Are Helped
By Lori Montgomery Washington Post Staff Writer Wednesday, April 16, 2008; D01
Should the federal government bail out a homeowner who lied about her income, bought a house far bigger than she could afford and now, predictably, cannot make the payments?
Probably not. But the better question might be whether the federal government should indict mortgage companies whose salesmen offered 'liar loans' in order to make a buck. E-mails boast about liar loans, bringing a new lexicon to the conservative old banking industry.
What about someone with a terrible credit record who has repeatedly missed mortgage payments? Should the government agree to pay off the lender if that mortgage fails?
What? People with 'terrible credit records' somehow got mortgages? Oh, tell me it isn't so. You mean mortgage banks, investment banks, bond rating companies and hedge funds actually profited off such a bad choice of mortgagee? And they have yet to justify…