On March 13, NCRC Members converged on Capitol Hill to press lawmakers to enact NCRC’s HELP Now proposal to address the nation’s foreclosure crisis. NCRC’s strength is its members. That strength was in full effect today.
Martin Feldstein, in the Wall Street Journal dated March 7, 2008 (page A15), presented a proposal to reduce the number of defaults and dampen the decline in housing prices. His proposal is a voluntary substitution of a portion of mortgage debt held by homeowners with other, much less costly, loan from the federal government. Mr. Feldstein was Chairman of the Council of Economic Advisers under President Reagan, and is a professor at Harvard University.
Under the Feldstein proposal, the federal government would lend each voluntarily participating homeowner 20% of his current mortgage debt, with a 15-year payback period and an adjustable interest rate pegged to what the government pays on two-year Treasury debt, which is currently only 1.6%. There are at least three sets of stakeholders in the current home mortgage crisis—homeowners, lenders/investors, and taxpayers. It is worth examining the Feldstein proposal from the standpoint of each of these groups. Read the rest of this entry »
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