Free Republic

There was an interesting article on Bloomberg and the Washington Post with the tantalizing title, “Why Obama’s plan failed to fix America’s housing crisis.” The article features Steven Nesmith (who wanted a bolder effort) and me (who said we shouldn’t have intervened at all). “They were well-intended, but they were not bold enough,” said Steven Nesmith, a former vice president at loan servicer Ocwen Financial Corp. who served as an assistant secretary in the Department of Housing and Urban Development during the administration of President George W. Bush. “They should have gone bigger and bolder with a robust plan to...

I have tried to devise the absolute worst mortgage loan that I can imagine. Fortunately, this loan is nothing more than a figment of my imagination -- at least, as far as I know. But take a cynical guy like me with a looming deadline and this is what you get. This fictional loan would contain many of the elements that appeal to borrowers hemmed in by affordability. Like today's option, adjustable-rate mortgages, borrowers would be able to choose an interest-only payment or even a minimum-payment option. While the borrower is lured by the minimum payment, what results is a...