So on Wednesday this week, the President will unveil his plan to address housing (specifically foreclosures). In the words of the great Philosopher Inigo Montoya, "let me explain - no, let me sum up":
- The housing/foreclosure problems were caused by lenders making risky loans to people who either couldn't afford a mortgage at all, or couldn't afford the amount they were borrowing.
- Often the lenders were "encouraged" to make these loans through incentives from Fannie Mae and Freddie Mac (quasi-government organizations).
- Now, President Obama wants to fix the problem by forcing the lender to not foreclose, and further by forcing them to accept a rewriting of the loans.
In other words, before lenders were coerced with the carrot to give loans to people who couldn't afford it, and now they are forced with the stick (judges will be allowed to arbitrarily rewrite the terms of loans in trouble) to continue providing financing to people who can't afford it.
Oh, and by the way...how do all you people who have worked hard and managed to not overextend yourself, and have managed to pay your mortage every month...how do you feel about this development? The government is basically rewarding people for being irresponsible.
For more details, see this article in the New York Times.
