Clinton Plan Could Worsen Housing Plight, Some Say

The New York Sun reports:

Senator Clinton's plan to rescue homeowners with a $30 billion federal aid package on top of a 90-day ban on foreclosures and a five-year freeze on interest rates for subprime mortgages could actually make market conditions worse, critics say.

Private companies may be less likely to lend if they know the government can come in and override the deal, some conservative scholars warn, or they may add costly premiums to account for the uncertainty.

Would you want to underwrite mortgages if the federal government can come in and change the terms of the mortgage?