Believe it or not (oh yeah, you should believe it) there’s controversy surrounding the President’s latest plan to mess with the housing market. As he announced in his State of the Union address he wants to have someone look through the deep dark past of mortgage giants to see what secrets they might be keeping hidden. And wouldn’t you know it, some people think this isn’t a good idea.
I mean, it’s safe to say that any idea the President, or any other politician in Washington has, will be met with opposition. And since everyone can agree that there’s a truckload of dirty deals behind each big lender there’s definitely something to find. So the question is what are the two sides of the story. (Actually, I’m going to show you the 4 sides of the story!)
1a) Why NOT to look into the past: It will be expensive, will slow the recovery, and expands unwanted government influence in the free market.
2a) Why YES to look into the past: The fragile recovery could be derailed by any new scandals so it’s better to preempt a massive shock to the housing system.
Okay, that’s all well and good, but here are the real reasons.
1b) Really why NOT to look into the past: Lots of Washington politicos managed to avoid responsibility for the financial crisis. But as more secrets come out we’re going to find many of them were deeply involved in letting these lenders get away with their crimes.
2b) Really why YES to look into the past: Some politicians are gaining ground as the big sheriff in town setting the system right. If they lose that image during a crucial election year they don’t really have much to stand for.
It’s a sad battle we’re going to witness as this is fought in Washington. But bottom line for you and me, we don’t trust big lenders, we know the value of the housing market, and we know how to make the real recovery happen. So make your voice heard in Washington, but don’t let it be the other way around.