The anger of America and the world has showered down on the mortgage business and the practices used over the last few years that led to so much damage. The toll for the irresponsible lending from all participants will be felt for years to come. It has become very easy to focus on the negative aspects right now while we are in the midst of its repercussions and taxpayers are mad because they feel the bill is getting stuck with them with no benefit to show for it. The primary dialogue in our nation right now is focused on the losses generated and the redistribution of income to individuals that purchased homes that they could not afford, and they should have never qualified for a mortgage by any measure. These arguments are as justified as they are correct, but there is another part to this story that is also true and it provides a bigger picture.

For all the shortcomings of the mortgage industry that has become all too familiar there has also been benefits conferred to many members of our society if we desire to see and acknowledge it. For instance, we could recognize all the people that are currently in a home that should not have been because of affordability or credit quality issues; however they are successfully paying their mortgages. They have become successful homeowners and it is important to realize that they represent the vast majority of such cases, only a small percentage of mortgages have actually gone bad but it has tarnished the whole system. An even larger and more widespread benefit is that every mortgage borrower has enjoyed significantly lower cost of financing due to the liquidity provided as capital flowed into the market. The system operating with Fannie Mae/Freddie Mac, the capital markets, securitizations, the shadow banking system and others have funneled large amounts of capital into the mortgage market resulting in substantial savings through the decades for borrowers. It is unknown just how much money has been saved over time, but it has been substantial and it was shared by every borrower most likely without their realization of that fact or how significant it was.

It is extremely difficult to concede these points with the knowledge at hand today and the current suffering that is being experienced. The payment being extracted from our society will be expensive indeed, maybe far exceeding any benefit provided by the system. This cost will be in the form of lost wealth and a heavy dose of intrusive governmental control going forward, which will bring its inefficiency into the equation that will be paid for by future borrowers. Taking this full picture into consideration, the question to ask is was it all worth it now that the bill has come due? This question really becomes rhetorical because it is certain that people will not have as much gratitude for the benefits of yesterday as they will anger for the pain and suffering of today.