The WSJ tells us that Democrats in Congress "are pushing measures to help struggling homeowners." Is that true?
The proposals discussed would use government money or government guarantees to buy up bad mortgages at prices that are almost certainly much higher than what they would command on the market. The plans would allow homeowners to renegotiate their mortgages and pay less than they do today. However, in bubble inflated markets (which have still only partially deflated) they would still pay far more in housing costs than they would to rent a comparable unit. Since prices are still falling, they would also have almost no chance of ever accumulating equity.
For these reasons, it is not clear that the proposals help struggling homeowners even if they do help banks. The article could do without this editorial comment.
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