for stabilizing the mortgage and housing markets consists of three basic components:
1) To encourage loan modifications for mortgages on the brink of foreclosure.
2) To expand the mortgage refinancing option for loans that are not otherwise eligible.
3) To lower mortgage interest rates through increase purchases by Fannie Mae and Freddie Mac (hereafter F&F).

I begin with a discussion of the overall goals and then turn to the specific proposals.

Absence of Overall Goals

Perhaps the plan’s greatest weakness is the failure to state the overall goals. One-off, ad hoc, remedies for a specific problem can fail for many reasons, including::
1) The proposals are made without any benefit/cost analysis. Taxpayers naturally wonder whether the benefits are worth the costs.
2) The programs are presented without any sense of a budget constraint. Even in a deep recession, resources have costs and allocations should represent priorities based on the benefits and costs of each proposal.
These concerns show up clearly in my questions on the specific proposals, to which I turn.