All Commentary
Monday, March 8, 2010

Government to Pay People to Sell Their Homes

“In an effort to end the foreclosure crisis, the Obama administration has been trying to keep defaulting owners in their homes. Now it will take a new approach: paying some of them to leave…. Taking effect on April 5, the program could encourage hundreds of thousands of delinquent borrowers who have not been rescued by the loan modification program to shed their houses through a process known as a short sale, in which property is sold for less than the balance of the mortgage. Lenders will be compelled to accept that arrangement, forgiving the difference between the market price of the property and what they are owed.” (New York Times, Monday)

Think of the effect on future lending.

FEE Timely Classic
“Toward an Austrian Critique of Governmental Economic Policy” by Israel M. Kirzner