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Mortgage Plan Analysis

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"Mortgage Plan Analysis"

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Andrew Jakabovics and David M. Abromowitz offer some detailed analysis of the mortgage plan put forward today. It’s kind of hard to summarize, so you’ll just have to read it yourself. They approve, but say there’s even more that could be done and “still more tools are available to the Obama administration as it rolls out its full plan, including modifying so-called REMIC rules governing the trusts that hold the mortgages to eliminate artificial barriers to modifications.”

I suppose you’d have to say that the major downside to this plan is not so much the cost, which is small relative to other stuff that’s happening, but the reality that messing around like this means that whenever the economy gets back on the upswing it’s going to be harder for people to get mortgages now that banks now that if things go wrong the government may well step in and start re-writing deals. On the other hand, I’m not really sure how much of a downside this is. Policymakers got into talking up homeownership as an end-in-itself in a way that never really made sense.

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