Subprime Mortgages and the Moral Imperative to Help Homeowners

Abstract:

Debate in Congress and among financial regulatory policymakers over how to manage the housing and credit crises have mostly focused on how the interconnected crises have affected the markets—and not on how it has affected the average American. When a large Wall Street investment bank such as Bear Stearns Cos., which was known for its aggressive mortgage lending cum mortgage securitization practices, is allowed to avoid bankruptcy because it’s too large to fail, but ordinary folk are told to pay heavily for their mistakes, then something is morally wrong.