[sickoflibs]

My sister lives in a vacation area, a for-closure capital of the country and her next door neighbor walked away, house empty still for over a year. Their own house is worth less than they owe, they took a home equity loan on non-earned paper gains like most of those failing now.(everyone was told to do that.)

To your point, obviously letting the bad debt being written off as losses has bad consequences(this is really the consequences of what proceeded the crash). That is the justification of all these measures since Sept 2008(Bush+Obama) . What is never asked is all the negative consequences of bailing out those who made the worst decisions, to get help to the innocent but unknowledgable that bought at peak.

I appreciate you taking the contrary point, for debate

[acoulterfan]

What about all of the people who refinanced with a large cash-out and then spent it on high priced toys making them unable to keep up with the payments? Are they going to have their principal reduced?