I’m traveling and so haven’t had much time (nor the internet connection) to study the Administration’s plan for the mortgage crisis, but I did catch the President’s remarks in Arizona and am just wondering how it’s possible that their plan can really do this:
And we will pursue the housing plan I’m outlining today. And through this plan, we will help between 7 and 9 million families restructure or refinance their mortgages so they can afford — avoid foreclosure. And we’re not just helping homeowners at risk of falling over the edge; we’re preventing their neighbors from being pulled over that edge, too — as defaults and foreclosures contribute to sinking home values, and failing local businesses, and lost jobs.
But I want to be very clear about what this plan will not do: It will not rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans. It will not help speculators — (applause) — it will not help speculators who took risky bets on a rising market and bought homes not to live in but to sell. (Applause.) It will not help dishonest lenders who acted irresponsibly, distorting the facts — (applause) — distorting the facts and dismissing the fine print at the expense of buyers who didn’t know better. And it will not reward folks who bought homes they knew from the beginning they would never be able to afford. (Applause.) So I just want to make this clear: This plan will not save every home.
I mean, when the government intervenes (subsidizes), but doesn’t outright take over, a market, how can they know how much the suppliers vs. the buyers will benefit, and how much bad suppliers vs. good suppliers, or bad buyers vs. good buyers, will benefit?