Strategic defaults

I was happy to see my home town, Los Altos, CA, in the NY Times today.  (The article was about foreclosures in the area, but still...)  The article really upset me though.  How stupid do mortgage lenders think people are?  

Fannie Mae and Freddie Mac, the two quasi-governmental mortgage finance companies that own most of the mortgages in America with a value of less than $500,000, are alternately pleading with distressed homeowners not to be bad citizens and brandishing a stick at them.


In a recent column on Freddie Mac’s Web site, the company’s executive vice president, Don Bisenius, acknowledged that walking away “might well be a good decision for certain borrowers” but argues that those who do it are trashing their communities.

Do they think that their sanctimonious moralizing will affect anyone?  Lenders take risks when lending money, which justifies the interest rate on the debt.  They took incredibly bad ones in the years leading up to 2007.  Now crying to the borrowers (and the media) when the bets aren't paying off is despicable.   I only hope people who are in over their head in debt are not swayed by the wolves in sheeps' clothing.  There are plenty of upstanding Google employees who will be happy to buy your house at a discount, and will not be 'trashing the community'.  Fannie and Freddie were the biggest enablers of the housing crisis, buying 80% of subprime loans.  Needless to say, they have no moral authority whatever.