Policy toward mortgage crisis needs adjusting

But why help those facing foreclosure? It strikes me that there is a range of good reasons. First, the damage suffered by 2 million people losing their homes to foreclosure won’t be limited to those people. Their neighbors will watch housing prices plummet, and neighborhoods grow more dangerous, as boarded-up houses attract vagrants and drug dealers. Their communities and schools will suffer from declining tax revenues.

Cutbacks in schools, teachers, police and firefighters will come just when they are needed more than ever. Finally, as more and more people get trapped — in homes they can no longer afford to sell, in mortgages that are higher than the value of the house — whole regions of the country will hit the skids economically. The Midwest is already in recession. It could easily spread.

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