Month: October 2012

Yesterday’s Boston Globe had this article about mortgage lenders that are giving homeowners of underwater properties a break, thanks to pressure from the federal government’s Make Home Affordable program. Not every bureaucrat is on board with the idea. Edward DeMarco, a government official who is temporarily overseeing Fannie Mae and Freddie Mac, warned Congress of the moral hazard of forgiving mortgage debt, as if that would give homeowners an incentive go into default. This is ironic, to say the least, because the Wall Street geniuses that transformed mortgages from a safe commercial banking practice into a risky investment opportunity are guilty of moral hazard on a grand scale. The essence of this is the “Too Big to Fail” doctrine. Wall Street wins, Main Street loses. The Globe article says that tens of thousands of underwater homeowners could receive a reduction in the principal balance. That’s a token gesture at best, but it’s better than nothing.

In contrast to that article, yesterday’s paper had this ad for a property in Massachusetts that’s going up for auction. “Previously marketed at $12,500,000. NAME YOUR PRICE.” If you try to download the brochure you’ll be prompted to register, but a direct link to the PDF is here. I’d love to know what the story is behind this property. I assume that a fantastically rich person had a phenomenal fall.

All of the troubles that continue to plague the mortgage market are now academic to me. My mortgage was at a local savings bank, and that’s where it stayed until last week, when I made the final payment. Do I resent those who are getting a loan reduction? Nope. No more than I think gay couples getting married in Massachusetts are a threat to my marriage.

I’m watching the first Presidential Debate, and Mitt Romney is infuriating. When he was governor here in Massachusetts, he did at least this much:

• Romneycare
• Retained the assault weapons ban when it expired nationally
• Signed the same-sex marriage law
• Supported a woman’s right to having an abortion
• And a personal favorite, forced Billy Boy Bulger into retirement

Of course Romney had to compromise as governor of Massachusetts! He was a Republican governor in a Democratic state. As President he wouldn’t have to compromise so much. The one, and only, hopeful outcome of a Mitt Romney Presidency is that he would be, as he was here in Massachusetts, willing to do the right thing, rather than adhere to party ideology. But I don’t trust him to do that again. He just said moments ago, “Massachusetts schools are #1 in the nation.” Why is that? It’s because we aren’t just Democrats, but realists. Romney’s problem is that at the national level he’s stuck with the platform of the Republican National Committee, which is determined to take us backwards in every way.