Congressman Barnie Frank (Democrat from Massachusetts) is urging lenders to suspend foreclosures. Granted, he’s currently focusing this request on lenders who have received federal money from the TARP program, but if that happens, he’ll certainly pressure all major lenders to do the same thing. So the question is: Is it a wise idea?
I’m going to weigh in on this right now. Barney Frank is personally and individually at the center of the failure of Fannie Mae. It is literally true that had Barney Frank not been in office, the Fannie Mae meltdown probably would never have materialized. So it goes without saying that the man has no worthwhile sense of good economics or business. And ultimately, it’s the taxpayers who suffer, having been stuck with the $800 Billion bill for the TARP program and the $800 Billion bill for Obama’s latest stimulus program.
So the question is: Is Barney Frank suggesting a good idea, that lenders should put a moratorium on foreclosures?
Absolutely not. Such a policy will directly INCREASE the number of people who do not pay their loans, since they’ll know that they are being protected by the moratorium. Even those who are fighting valiantly to keep their loans current or at least out of foreclosure will find that there is no motivation to continue doing so.
There are plenty more reasons to oppose such a socialist policy, but I’ll leave some of those things to be pointed out by you, my esteemed reader.
Agree? Disagree? Either way – tell us what you think in the comments area below. And thank you for reading http://realestate.BryanEllis.com!
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