Learning to Love the Housing Bailout It's unfair, but the economy doesn't care

摘要

Tennessee senator bob corker is not in a forgiving mood when it comes to people whose home loans are underwater, particularly if they borrowed beyond their means-or cheated to do so. That's some ir.i million loans and over $700 billion worth of negative equity. He's torqued that the recent $26 billion housing-industry settlement with the big banks allows them to lower their loan principals-and possibly harm investors who own the mortgage bonds tied to those loans. He nearly came unglued when a Federal Reserve official suggested that the government's mortgage guarantor, Fannie Mae, could also fund a bailout for distressed homeowners. Nothing doing, says Corker: "Reducing the principal on home loans for borrowers who put no money down amounts to a massive wealth transfer from places like Tennessee, where most homeowners have borrowed responsibly, to places like California and New York, where exotic mortgages were widely used to finance a speculative housing boom."