At the Atlantic, David Indiviglio argues that the plan Obama announced today for increasing the number of homeowners who refinance their mortgages could work better than the administration’s previous efforts.
Even if the plan works, however, the taxpayers will suffer greater losses on Fannie Mae and Freddie Mac.
In RealClearMarkets, Peter Morici writes that there’s a worst-case scenario that the administration isn’t talking about. By encouraging looser underwriting standards for government programs intended to increase mortgage refinances, the plan will generate all kinds of credit risk: “What the president is about to do won’t create another housing bubble-too many foreclosures are about to hit the market-but it is politically inspired and an economically irresponsible act that could easily result in many more foreclosures and another credit collapse down the road.”
