Clinton Claims Better Housing Plan
Jul 31, 202090.6K Shares2.1M Views
Both Hillary Clinton and Barack Obama have some notions about how to address the nation’s housing crisis. At the debate last night, Clinton contended she’s got a more significant plan,including a proposed five-year freeze on mortgage interest rates.
Whether she’s right or not – her ideas aren’t actually drawing a lot of fansin the business world – may be irrelevant.
Check out this postfrom the Financial Times. It’s the most insightful piece I’ve seen on what we’re beginning to understand about the housing market. A rate freeze, it points out, won’t do much to counter the growing tendency of borrowers to walk away from their houses, even those who can still pay on their loans. If their mortgage costs more than the value of their house, they’re choosing not to keep it, but to pay instead on their credit cards or autos first.
That’s a huge change from the past, when homeowners would lose everything else in bankruptcy while clinging to any last chance to keep their homes. But mortgages were different then. This is a development that a rate freeze or other proposals out there doesn’t address.
Before any of the candidates begin crowing that they can tackle the housing market’s problems, keep in mind we’re just beginning to figure out what they really are.
Paula M. Graham
Reviewer
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