Subprime Solution

I should say "less than ideal" to be perfectly clear.

The Federal Reserve announced a "sweeping response" to the mortgage meltdown today; read the whole story here.

So, in summary, the Fed is acting to protect consumers from lenders who want to make them mortgages. Here's the key "reforms":

The proposal would restrict lenders from penalizing risky borrowers who pay loans off early, require lenders to make sure these borrowers set aside money to pay for taxes and insurance and bar lenders from making loans without proof of a borrower's income. It also would prohibit lenders from engaging in a pattern or practice of lending without considering a borrower's ability to repay a home loan from sources other than the home's value.

While we're at it, shouldn’t government, at some level, protect people from credit card offers? How about protection from signing up for the wrong insurance coverage? Or, a true scourge of our times, icy roads? Clearly, walking or driving this time of year is dangerous; are we to bear that risk all by ourselves?

I’ve bemoaned this problem before. But until we start to be self-governing once again, this is only going to get worse.