I thought this was interesting, I read two editorials, one from yesterday’s New York Times and the other from today’s Wall Street Journal.
See if you can guess which excerpt goes to each paper.
One is entitled:
This year’s housing crisis:
… Things didn’t have to get this bad … The best way to modify an undewater loan is reduce the principal balance, lowering the monthly payment and restoring equity. But for the most part, lenders have refused to reduce principal because it would force them to make an immediate loss on the loan. Lenders have vehemently – and successfully – resisted Congressional efforts to change the law so that bankruptcy courts could reduce the mortgage balance for bankrupt borrowers. To avert the worst, the White House should alter its loan modification effort to emphasize principal reduction.
The other editorial is entitled:
Let’s stop pretending Fannie and Freddie serve the taxpayer:
… some assert that Fannie Mae and Freddie Mac “the administration has put the public interest first. It has instructed their regulator to have them administer efforts to cut monthly mortgage payments for millions of Americans to avert foreclosure.”
It seems to me, that taking some money from tens of millions of taxpayers to give lots of money to a few million overleveraged homeowners may not be in the “public interest.” When the next politician congratulates himself over this heist while asking us for gratitude, Americans should realize whose interest is really being served.