A green mortgage is essentially a new mortgage underwriting technique which a borrower can qualify for if the house is energy efficient, healthy, and durable.

Green mortgages require a larger initial investment and a larger loan (up to 15%). This investment will finance green improvements to an existing home or finance the additional costs of building a new home to green standards. However, over the life of a mortgage (15-30 years) the savings from energy and health costs will be substantially more than the increase in your PITI, thus yielding returns that could reach tens of thousands of dollars. Furthermore, since the initial improvement was financed by your mortgage, the returns of your investment are felt immediately as you will be paying less energy+PITI.

Green houses can cut energy costs by up to 50%. It is unknown how much health costs will be reduced by improved air quality.

By factoring in these savings into mortgage underwriting formulas, borrowers can qualify for larger loans. On a macro level, this means that more people can qualify for home loans, that the marginal borrower is going to need less total income, and that access to homeownership will improve.

Because mortgage default is so costly to the lender, underwriters must allow a good deal of type II error (false negatives) to make up for the risk of a type I error (false positive - so basically banks deny a lot of applications that would have turned out to be solid investments to overcompensate for the uncertainty of risk). By factoring in energy and health savings into mortgage underwriting, underwriters get a more accurate estimate of a borrowers risk of default and are thus more confident in their assessment. Improved confidence in risk assessment means that more loans will be accepted at the margin, which will primarily benefit low-income households and underserved populations.

Lastly, mainstreaming green mortgages could be useful in the housing climate today. By allowing more people to take out loans, this will shift the demand for housing upwards, driving up price and quantity. By investing in the quality of our homes, houses will be worth more, further driving up price.

Notice I haven't made an environmental argument? Thats because it is a good policy even without the added bonus of saving the planet.

So basically Green Mortgages are fucking cool as shit. They literally have zero down-side. Good for lenders, borrowers, good for the economy.  Some may say that this isn't the time to invest in this stuff, but I'd argue that this is the perfect time.

...and its sinking very rapidly.

After this mess is over, the federal government should not begin regulating the mortgage market where the rubber meets the road.  That is to say, the federal government should not dictate the terms of mortgages to private entities.  This would handcuff the financial system to regulations that would have to be adjusted almost constantly.  Furthermore, regulations would create distortions in the marketplace as actors seek to find ways around them, which given the complexity of the mortgage market across income levels and geography, they would be certain to do.  Any attempt to regulate mortgage terms would be futile and would do much more harm than good.

However, there are two policy changes that the federal government should address:

1)  Use Fannie Mae and Freddie Mac to encourage better lending practices.  The GSEs buy up roughly 40% of the nation's mortgages.  Though most of their products are relatively safe and their subprime portfolio was minuscule - they will almost certainly gobble up a larger share of the market now after the takeover and the failures of several investment banks.

2)  Regulate Capital:Leverage ratios.  Had the banks not been so capital constrained, they would not have all had to offload assets simultaneously, creating a "run on the bank" and driving prices down. 

This 2nd policy is essential.  Since we are not likely to see another housing bubble such as this one, policies directed specifically at the housing market are likely to simply create barriers to market transactions.  Policies aimed at maintaining a level of liquidity will protect against unforeseen problems in the future.

http://www.fivethirtyeight.com/2008/11/interview-with-john-ziegler-on-zogby.html#comments

I am not someone who is going to make a lot of fuss over the Lieberman thing, but Dean's argument that kicking Lieberman out of his Homeland Security Chairmanship is inconsistent with the President-Elect's nonpartisan tone is crap. 

First, Obama's message of nonpartisanship was not one of appeasement.  The one thing that sold me on his candidacy was how he argued against the Clinton era triangulation approach to public policy.  Instead, Obama's message, if you listened carefully, was one of tone and not policy.  That is to say, we disagree with Republicans, but we will still treat them with respect and we don't call them traitors and question their loyalty to the Republic. 

Secondly, Joe Lieberman is a Republican in this policy area.  This isn't about revenge, and it isn't about Democrats growing a spine.  This is about handing over control of an important committee to a Republican and forsaking the will of the people.  Americans gave Democrats a big victory Nov. 4 and this is a smack in their face.

Fellow web-wise wonks, fellow netroots nerds, Barack Obama has something that Bill Clinton did not: you.  You know whats coming; Sean Hannity, Rush Limbaugh, and Matt Drudge will attempt to drive the media narrative with attacks on President Obama and Congressional Democrats.  They will seek destroy the majority and presidency we have worked so hard to regain with falsehoods about our policies and our motives, character attacks, and false scandals. 

This Presidency will be the true test of the netroots mettle.  To this date, the Democrats have built a cyber-army capable of raising vast sums of money, created a new home for a liberal narrative, and contributed to electoral landslides in the last two elections.  But this is nothing compared to what we must do now. 

Everytime they come at us with an unfair attack about healthcare reform that begins to gain traction in the media, any and every healthcare savvy netroots nerd must blog on TPM, write a diary on KOS, comment on news articles, and link to reputable sources on their facebook page. 

Everytime they unfairly attack our character or our President's character through the media, we need you to calmly present the facts.

Everytime drudge invents a scandal that Wolf Blitzer decides to run with, we need you out there disseminating truth. 

Don't sit on the sidelines, if we fight the smears and work for our policies we may actually get something out of this Presidency.  I am determined to prevent this Presidency from going the way of Bill Clinton, which left us unsatisfied as the policies we cared about never got anything more than lip service due to the fact that republicans dominated the media narrative (and the fact that Bill Clinton cared more about his approval ratings than using his political capital to win some policy fights).  In order to do this, we need you to enlist.