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Did Allen Greenspan really recommend that homeowners refinance their 30 year mortgages into Adjustable Rate Mortgages (ARMs)?

The answer, incredibly, is yes he did, in his February testimony to Congress. And why would he suggest such a ludicrous move? With 30-year mortgages at 30 year lows (hovering around 5%), why would anyone refinance into an ARM, where the interest rate will skyrocket once interest rates start moving up?

The answer may well lie in this very cogent article by Benjamin Wallace-Wells over at The Washington Monthly.

The title of the article?

"There Goes the Neighborhood:
Why home prices are about to plummet--and take the recovery with them."

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