Akkam’s Razor

It seems to me that before we begin talking about a homeowner bailout, we need to ascertain who exactly is losing which homes (foreclosure chart pron at the NY Times via the Big Picture) - is it homeowners losing their primary residence, a ‘flipper’ losing a speculative investment, or someone losing an second or vacation home, or a landlord losing a rental property, and targeting relief appropriately.

What goes unsaid in much of the breathless coverage of the housing implosion is that being subprime doesn’t necessarily mean poor-people or deadbeats - I can just as easily be someone who is over-extended in debt-to-income, over-obligated on payment-to-income, or having inadequate lending at closing due to insufficient equity.

Although it seems moral and ethical to keep a hard working family in their home, it seems to create a moral hazard to bail
out investors. Oh, wait. Bail-Stearns threw all that out the window, didn’t they?

photo credit: joelogon

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