With mortgage rates at 50-year lows perhaps the way to fix the housing sector is to refinance all mortgages--to have, in effect, the government "normalize" the mortgage marketplace.
That's essentially the proposal of two Columbia University professors, Christopher Mayer and R. Glenn Hubbard.
"Under this plan," they write, "the government would take action to return mortgage rates to what they would otherwise be if the mortgage market were functioning normally (about 160 basis points above the 10-year Treasury rate). In addition, policy makers would help address refinancing problems for owners with negative equity by engaging in sharing equity write-offs with lenders.
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Is it time for the government to set mortgage rates?
That's essentially the proposal of two Columbia University professors, Christopher Mayer and R. Glenn Hubbard.
"Under this plan," they write, "the government would take action to return mortgage rates to what they would otherwise be if the mortgage market were functioning normally (about 160 basis points above the 10-year Treasury rate). In addition, policy makers would help address refinancing problems for owners with negative equity by engaging in sharing equity write-offs with lenders.