HLS, when things go wrong if the market is left to cure itself, it usually will. The credit contraction is exactly what is needed to restore health to the market. The same people who are foreclosing now should have NEVER qualified for a home to begin with. There really is no harm in not buying a home if you cannot afford a home. In fact the strict measures would serve to protect the people that cannot think clearly for themselves, protect investors who invest in hedge funds that hold cdo’s and other similar instruments, protect taxpayers from having to fund bailouts….
All in all, I think it is a much better plan. The economic consequences that we will suffer are needed and in fact destined to happen. I am consistently harping about how harsh recessions are so I understand the ramifications of a credit contraction.
I don’t believe that a 5 year arm is in anyones best interest today.
