The too big to fail banks, which have a financial umbilical cord tied to Washington, should be allowed to go under. Their assets will be auctioned, and we’ll all move on.
Fannie and Freddie need to disappear.
Washington needs to get out of the mortgage business.
Loans to people who can’t prove that they can pay should be stopped. There is an affordable home ownership option for them; it’s called a mobile home.
—In exchange for having their lender take a haircut over 110 percent, borrowers would accept full recourse on the modified loan.—
If I was underwater $200k like some of my friends in Seattle are, there is NO way I would take that deal. My sister is going on three years without making a payment on her Seattle home. There is talk the foreclosure may actually start going forward soon. When the Sheriff shows up, she’ll simply hand over the keys and leave.
Looks good on paper anyway
If the wise and all-powerful idiots in Congress, Fannie, Freddie and the White house had just kept their greedy mitts out of the housing “crisis”, and let the market take it’s natural course, housing prices would have bottomed out by now. The loss in equity - false and real - would have been far less that the dollar amount that has been poured into the housing market in an attempt to save it.
Who ever thought that making a 100% loan on a $300,000 property to someone whose net income was $1500 a month was a good business model?
When I was buying a home, our lender said that I qualified for a really expensive house. I bought one for much less knowing that things could change and a smaller mortgage payment would be easier to deal with. I know plenty of people who bought way more house than they needed. It makes them look and feel important. Now, because I was diligent and rational, I’m supposed to pay for arrogant, greedy stupid shits who overbought? Rewarding people who don’t play by the rules and punishing the people who do play by the rules always works out so well.