Thursday, April 05, 2007
The Housing Market Bailout
I'm usually on here defending regulation from Henry and V, but this story just irks me. Ohio is raising $100m to bail out homeowners with ARMs facing foreclosure. Who the hell gets an ARM when interest rates are at their lowest levels in many decades? An ARM is a wager between you and your lender: if interest rates fall, you win, if they rise, they win. If you start from an historic low, who do you think is going to win that wager? This is a market populated by predatory lenders and foolish debtors. Dumping tax dollars in to keep it afloat may not be the brightest idea.