Saving the housing market? According to The Wall Street Journal, the Obama administration will announce another housing market intervention plan designed to save the housing market.
A market is defined a meeting between buyer and seller. The echo that’s left after they have exchanged money for goods and services is a contract that spells out the terms and conditions of the sale. By this they have already left the market and all that is left of the relationship is the continued execution and enforcement of the contract.
In the case of housing, the sale of the house is done. When the buyer bought the house, they left the housing market. When the buyer cashed the check from the bank, he left the finance market. All that is left is the mortgage agreement that she is required to complete. If things are going wrong, she can renegotiate the finance contract or mortgage in private with the bank. If renegotiations pan out, she stays. If not, the property is sold in order to meet the claims under the contract.
The question becomes, why is the federal government wasting resources to resolve breaches of contract, when such breaches are best left resolved in state courts? This money could be going to infrastructure projects that could put people to work in order to pay their loans.
This mortgage aid program is waste.