Zero Percent Mortgages Will Make People Buy Houses Again

Remember how interest-only loans enticed people to buy houses that lead to the housing bubble?

Since a big chunk of mortgages today are guaranteed by the government and many too-big-too-fail banks are relying on taxpayer bailouts, why not offer principal-only loans instead?

Perhaps a 10-year principal-only mortgage will encourage more people to buy a house since they can build equity much faster. If we are giving tax credits, mortgage interest deductions and bank bailouts, why not explore this option?

Why should I keep my money in these banks when I earn nothing? I might as well buy a house and also enjoy what these banks enjoy, zero percent interest. Zero percent is available when buying cars. Why not have it when buying a home?

If you can own at zero interest, why rent?

If banks won't do it, Fannie and Freddie should probably consider being a direct lender and remove these TBTF middlemen. I heard this approach is now being applied on student loans, right?