I hardly EVER, even NEVER agree with you (Kuttner). This is no exception. While you seem to be saying the financial marketplac
e segments that created the mess need to pay up, you fail to note that the best place to assess the proper levels of punishment is the marketplac
e. Forced "mark-to-m
arket" valuation of mortgage and related investment
s might indeed cause a few to fail, be re-capital
ized or nationaliz
ed and resold to investors -a la S&L Resolution Trust Corp- a success in a bad environmen
t.
A government settlement of any kind that gives funds to the U.S. Treasury or States instead of a setlement which forces the discipline of the marketplac
e, is neither helpful to the degree necessary, nor will it allow the pricing correction necessary to restore equilibriu
m to the housing marketplac
e, encourage investor interest AND new owner/occu
pant buyers.
Bank tightening of credit in response to previous excesses, including absolute fraud by organized crime , as well as delusional borrowers, has led to many willing buyers being unable to obtain financing. Some of those millions of already foreclosed and to be foreclosed homes could be rented to qualified buyers in lieu of stringent down payment equity requiremen
ts, and part of the rent credited to an option-to-
buy. the basic step of getting financial institutio
ns to mark-to-ma
rket is first in reaching a marketplac
e clearing level that will allow housing to revive as the very important segment of the economy that it is.
Read the Article at HuffingtonPost
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