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An Opinion on the Bush Mortgage plan

Posted by: Michael Mandel on December 07

Nouriel Roubini likes the Bush plan:

I have already commented before on why an across-the-board (like in the Treasury/banks plan) rather than a case-by-case approach to sub-prime mortgage restructurings makes sense. Moreover, the attempt to distinguish between those who are insolvent and would default anyhow (even after a freeze of the reset rate), those who can pay and don’t need debt relief and those who are illiquid but solvent (i.e. can likely keep on servicing their mortgages if the teaser rate is frozen for a while) also makes sense. Of course, the Treasury plan may or may not provide enough relief to enough homeowners depending on how it is implemented. But its basic conceptual approach is sound.

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Reader Comments

Brandon W

December 10, 2007 09:19 AM

The fact that the government is bailing anyone out of their responsibilities, by default, makes this a complete failure. It is one more piece of evidence that Republicans are no different than Democrats when it comes to big government, the nanny state, and interference in free markets.

Joe Cushing

December 11, 2007 08:20 PM

One argument for the bail out is that consumers were targeted somehow. If that is the case, those consumers should be able to sue. Otherwise, people should have to live with their choices. I made a bad mortgage choice under the influence of a high pressure sales person but ultimately it was MY bad choice. I was lucky enough to find someone to refinance me on the third try. This was after I tossed several thousand dollars down the toilet. This won't happen to me again. I don't think you can sue someone for telling you that you will be able to refinance out of a loan when in fact he doesn't know that. I think we should let this be an expensive lesson for everybody.

Thank you for your interest. This blog is no longer active.



Michael Mandel, BW's award-winning chief economist, provides his unique perspective on the hot economic issues of the day. From globalization to the future of work to the ups and downs of the financial markets, Mandel-named 2006 economic journalist of the year by the World Leadership Forum-offers cutting edge analysis and commentary.

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