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Sen. Clinton on mortgage relief

Altering the bailout to add homeowner relief quite likely will deepen the hole of the holders of mortgage debt whose situation occasioned the bailout in the first place. Hans Bader:

Senator Hillary Clinton wants the taxpayers, and risk-averse people who took out fixed-rate mortgages, to subsidize people who took out adjustable-rate mortgages. In today's Wall Street Journal, she says that people with adjustable rate mortgages should be able to keep their introductory low interest rate forever, even though no one would ever have offered them a permanent rate that low, and even though the introductory adjustable rate is lower than the rate they would have received on a fixed-rate mortgage. (When I bought a home, I had the option of either a fixed 5-percent mortgage, or an adjustable-rate mortgage with an introductory rate of 1 percent that probably would have risen to 7 percent or more by now. I took the fixed 5 percent rate).

Clinton also advocates a temporary moratorium on foreclosures....

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Isaac Gorodetski
Project Manager,
Center for Legal Policy at the
Manhattan Institute

Katherine Lazarski
Press Officer,
Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.