Ed DeMarco: Capricious, arbitrary and cruel. And an idiot.

Idiot. Grant the banks billions in loans and offer nothing to homeowners - because a small number might  strategically default?

Let me see if I can square this circle: the banks lent unprecedented amounts of money in a few years up to 2008. This helped drive up house prices. Then the economy crashed and millions of people were left high and dry after believing the conventional wisdom that "house prices never go down". The banks believed it, the regulators believed it and people believed it. And the two loan guarantors not only believed it - they promoted that idea! So when prices plummeted and the housing market crashed, the banks got billions and home owners got... A few pennies if they qualified. And now, in an effort to help the economy, the Federal Housing Finance Agency decides it really doesn't want to help people recover.

So what if 19,000 people out of 1.4 million decide it's better to default? That's 1.3%! It's about time home owners got a bail out - and so far Tim Geithner dropped the ball on that, Congress didn't even bother thinking about it and now the top FDHA official denies the help - because 1.3% of recipients might default.

He's not just an idiot: he's a capricious, arbitrary and cruel idiot.

Carolyn Ann