Mortgage Lending: Damned If You...
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I'm not the first to notice this, but it bears repeating:
--Back when banks and other "greedy capitalist bastards" refused to loan money to poor people in poor neighborhoods, they were damned by politicians and bureaucrats for "redlining."
--Now that banks and other "greedy capitalist bastards" are indeed loaning money to poor people in poor neighborhoods, they are being damned by politicians and bureaucrats for "predatory lending."
Is it possible that maybe, just maybe, the problem is with the politicians and bureaucrats and not with the banks and other "greedy capitalist bastards"?
Either way, expect taxpayers to be the truly innocent victims.
But could you imagine the chilling effect on mortgage lending if banks were suddenly told that, in the event of default, their mortgages (i.e., their liens on the properties) were in fact nothing of the kind, but just another smile-and-handshake IOU backed only by whatever recovery a judge might feel was appropriate? Does Durbin not understand the underlying, and all-important, distinction between secured versus unsecured debt, and the potentially devastating implications of blurring or eradicating that distinction?
Or is he, like Schumer, simply doing what politicians do best: telling simpletons what they want to hear, reality notwithstanding?
--Back when banks and other "greedy capitalist bastards" refused to loan money to poor people in poor neighborhoods, they were damned by politicians and bureaucrats for "redlining."
--Now that banks and other "greedy capitalist bastards" are indeed loaning money to poor people in poor neighborhoods, they are being damned by politicians and bureaucrats for "predatory lending."
Is it possible that maybe, just maybe, the problem is with the politicians and bureaucrats and not with the banks and other "greedy capitalist bastards"?
Either way, expect taxpayers to be the truly innocent victims.
Faced with a possible tidal wave of home foreclosures beginning this fall, Democrats and Republicans are battling over a philosophical question with huge practical implications: should the government ride to the rescue?Schumer is a socialist whiner who screeches his radical liberal indignation over this travesty or that every weekend via press release. This is nothing new.
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Senator Charles E. Schumer of New York, chairman of the Joint Economic Committee, has proposed that the government distribute $300 million to nonprofit groups that could advise families on how to refinance or renegotiate their mortgages. The Senate recently included $100 million for such programs in a spending bill for HUD.
Another idea, being considered by Senator Richard J. Durbin, Democrat of Illinois, would give bankruptcy judges the ability to revise mortgage contracts, much as they already do when sorting out payments to other kinds of creditors.
But could you imagine the chilling effect on mortgage lending if banks were suddenly told that, in the event of default, their mortgages (i.e., their liens on the properties) were in fact nothing of the kind, but just another smile-and-handshake IOU backed only by whatever recovery a judge might feel was appropriate? Does Durbin not understand the underlying, and all-important, distinction between secured versus unsecured debt, and the potentially devastating implications of blurring or eradicating that distinction?
Or is he, like Schumer, simply doing what politicians do best: telling simpletons what they want to hear, reality notwithstanding?
Posted by Kip on
28 August 2007
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