A Little Ray of Sanity

by digby

Dean Baker has been recommending this since the beginning of the housing crisis. How do you deal with all these people who are losing their homes while at the same time dealing with the plummeting property values in places where there are many obvious foreclosures? And how do you deal with the moral hazard of major debt forgiveness? (That question should have been put to the banksters first and foremost, but well … they are so talented and productive that moral hazards don’t apply to such as them.)

Anyway, it looks like Fannie Mae is going to give a shot to letting people stay in their homes as renters rather than forcing eviction. People obviously lose their investment, but they don’t lose the roof over their heads. And the banks have people living in their foreclosed homes.

The devil is in the details, of course, but if it works it’s a much better outcome for everyone.

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