Just to make the homes affordable to those “naive” home-owners, instead of subsidizing them with free money from taxpayers? Fed won’t have to lower the rates to amusing level. Banks get the interests of the loan paid. Savings also earn reasonable interests. This will motivate people to save instead of making gigantic debt in the future.
I have a better thought. Why don’t we just let the idiots, who bought houses they couldn’t pay for, go yet to be and default. Then those of us who haven’t been able to meet the deprivation of one, can now buy into a cheap home.
Let the fools pay the price for their foolishness.
Where is my bail out?
What incentive to hard working people have to pay off their mortgage on the time that they are supposed to if you can get a 50 year mortgage instead. Let capitalism be capitalism. Equipment will work out for the best. On paper it does signal excellent but there are many other factors to be considered and that’s where you force find out that it probally won’t help.