Sub-Prime Workout – good on the whole
The only concrete objection I’ve seen to the Treasury’s plan to workout the sub-prime mortgage situation is that it does not have the force of law and come smuck will sue mortgage service companies for implementing it. All I can say to that is that even if the arrangement did have the force of law someone would sue over it anyway. There are way too many lawyers and they are always looking for work.
Another objection is that the plan won’t really save anybody’s house from foreclosure. I don’t believe that, because if people really want something then they will work to solve the problem. This approach gives people time. If they use it to solve their mortgage problem, good. If not, well they made their own choice. The plan does help those who want the help.
The most important feature of the plan is that it slows the force of the market down enough so that we avoid a panic. That sort of mentality will hurt all but a few scavengers.