Candidate Promises to Blow Up Housing Market Even More
Posted by leowalker on October 6, 2008
Biden -”Number two, with regard to bankruptcy now, Gwen, what we should be doing now — and Barack Obama and I support it — we should be allowing bankruptcy courts to be able to re-adjust not just the interest rate you’re paying on your mortgage to be able to stay in your home, but be able to adjust the principal that you owe, the principal that you owe.” -Transcript of Palin, Biden debate – CNN.com
Full details over at Sense of Events. The money quote:
A better way to destroy the mortgage market than what Biden-Obama propose could not possibly be imagined. For what Joe said (said twice, count ‘em above, twice) is that the government will decide, completely arbitrarily, what the future value of a home will be by adjusting the principal balance to be repaid. Because Joe will never adjust the principal upward, there will be no bottom. Lenders will not be able to predict with assurance whether they will even be able to recover their principal, much less recover their opportunity costs of the loaned money plus enough profit to run the business.
Looks like it’s getting to be time to change careers – again. Damn it.
