Chicago voters could soon get to decide whether to strip banks and mortgage companies — key players in the foreclosure epidemic — of their long-standing exemption from the city’s real-estate transfer tax. By a vote of 8-to-2, the City Council’s Finance Committee agreed today to put that resolution on the ballot, either on Nov. 2 or Feb. 22. Only after voters approve a referendum could the City Council vote to end the tax break.
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The average U.S. rate for a 30-year fixed mortgage fell to 3.33% this week, according to Freddie Mac, as the Federal Reserve’s bond-buying program created demand for securities backed by home loans.
By virtually eliminating any barrier to entry to obtain forbearance, policy makers have created outrageous moral hazard with potential costs that are unfathomable.