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Is mortgage-debt forgiveness worth the “moral hazard?”

Newsletter_MarketMatters_newspaper.JPG  The Wall Street Journal

It’s been one of the most vexing problems of the mortgage crisis: Do policies that restructure loans for underwater borrowers encourage homeowners who don’t need help to default? The federal regulator for Fannie Mae and Freddie Mac has said that creating such a “moral hazard” is one of his top concerns now that the Treasury Dept. has offered to subsidize the costs of debt foregiveness for loans backed by the firms.

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Published Friday, April 06, 2012 7:12 AM by Gail Griffin, GRI, e-PRO
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