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Instead of all of these writeoffs and foreclosures and mortgage company bankruptcies how about this solution?
Housing values are reset much lower with the mortgage reset for that amount. For example when the bubble was at its peak if someone paid 500K for a house and its now worth 300K, thats fine they pay 300K (with the interest of course on the mortgage, none of this subprime crap) instead of the original 500K mortgage.
This is probably very simplistic, but I guess the idea is that it would reset the market values of houses to what they should be instead of what they went up to because of the endless speculation.
I think less money will be lost by all parties, yet hopefully all will take responsibility because there will be mortgages that consumers can pay off, and banks can cover. I think this solution (or some variance on it) would make all parties in the housing mess take part in the solution since all parties are in some part responsible for the problem.
Try to keep the responses constructive. If you have some creative solutions for the housing mess it'd be nice to hear them.
And when you reset the new mortgage to the new lower value, who pays for the losses?
How do you stop the onrush of people yelling and screaming by everyone who borrowed responsibly, and have paid their bills on time?
How also do you stop the onrush of people claiming their properties have dropped in value, even though they havent?
What happens when the property values increase, or do you create higher mortgages for those who had value added to their properties because they were responsible?
Its called bank repo the ones who cant pay their mortgage, then take that property and put it back on the market, letting the banks take the hit when they have to sell at a loss.
Your solution wont work because the day before it is initiated, I'm going to run out and buy $50,000,000,000 worth of over inflated property and then claim that I was over charged and the mortgage company should pay me..
And when you reset the new mortgage to the new lower value, who pays for the losses?
How do you stop the onrush of people yelling and screaming by everyone who borrowed responsibly, and have paid their bills on time?
How also do you stop the onrush of people claiming their properties have dropped in value, even though they havent?
What happens when the property values increase, or do you create higher mortgages for those who had value added to their properties because they were responsible?
Its called bank repo the ones who cant pay their mortgage, then take that property and put it back on the market, letting the banks take the hit when they have to sell at a loss.
Your solution wont work because the day before it is initiated, I'm going to run out and buy $50,000,000,000 worth of over inflated property and then claim that I was over charged and the mortgage company should pay me..
When all property values sink (because of foreclosures), everyone loses money on their homes. Someone who responsibly borrowed 200K and now the house is going to be worth 150K still loses money and the banks reap all the reward from responsible people as well.
I think the house flippers are a more isolated case and a cheap argument for not trying to come up with a more comprehensive solution.
When all property values sink (because of foreclosures), everyone loses money on their homes. Someone who responsibly borrowed 200K and now the house is going to be worth 150K still loses money and the banks reap all the reward from responsible people as well.
I think the house flippers are a more isolated case and a cheap argument for not trying to come up with a more comprehensive solution.
Wrong.. not all properties sink in value when some people lose their homes due to foreclosure, because property values swing up and down. Are you proposing that everyone should only owe 75% of their current mortgage on their properties (i.e. $200K borrowed on a $150K home)?
When properties go down in value, individuals who hold on to their properties are rewarded because property values will eventually go up.
Under your proposal, how would the banks reap ANY reward if they are writing down 25% of their mortgage loans, (btw, most of which are guaranteed by the taxpayers, who then have to pay the 25% losses).
Try to keep the responses constructive. If you have some creative solutions for the housing mess it'd be nice to hear them.
1. Folks made their beds. Let them lie in them.
2. Next time around, run the numbers and perhaps, and I realize this is a novel thought, actually read the fine print.
Absolutly, let them loose their home and let the mortgage companys and banks loose for being so greedy, it's a good lesson for them. There is just no way that someone signed for a house at $500,000 should have it reduced to $300,000, that would be punishing those of us who were not greedy or stupid during this time. Bailouts do not teach anyone a lesson.
The proposal is too broad. I favor allowing folks with sub-prime mortgages to refinance at the current 30 year rates, and if they still can't afford this they should just lose the house (or rent out rooms for payment assistance).
Your property value goes down and the bank decreases the loan amount and loses money (since they already PAID the previous owner) while you don't incur any loss... and have a lower principal... basically you just robbed the bank of 300k... no problem with that right?
Your property value goes up and the bank adjusts its loans so that you owe more even though the bank never paid more so the bank ends up robbing you... oh wait.. you don't want it to work that way? I see it's a one-way street...
I don't think so... if the banks can't charge you more for an increase in value of your home, you DEFINITELY cannot pay less because the value of your home is less... I really hate entitlements...
Its like saying I bought a brand new car and ten years later only paid half of it but since it is worth less than the remaining balance, I don't have to pay the full amount cause its not worth that much anymore.... B.S.
Instead of all of these writeoffs and foreclosures and mortgage company bankruptcies how about this solution?
Housing values are reset much lower with the mortgage reset for that amount. For example when the bubble was at its peak if someone paid 500K for a house and its now worth 300K, thats fine they pay 300K (with the interest of course on the mortgage, none of this subprime crap) instead of the original 500K mortgage.
This is probably very simplistic, but I guess the idea is that it would reset the market values of houses to what they should be instead of what they went up to because of the endless speculation.
I think less money will be lost by all parties, yet hopefully all will take responsibility because there will be mortgages that consumers can pay off, and banks can cover. I think this solution (or some variance on it) would make all parties in the housing mess take part in the solution since all parties are in some part responsible for the problem.
Try to keep the responses constructive. If you have some creative solutions for the housing mess it'd be nice to hear them.
This is a terrible idea.
Who would determine the value?
Who would be eligible...anyone who is upside down?
Using your example what if the $200k in 'lost value' came back in 5 years?
So the sellers gets the $500k from the lenders and then the lenders just eat $200k per loan??
You say "all parties would be taking part"....what part are the homeowner's taking?? They bought a $500k house and only have to pay $300k for it????
The solution is to let the market take its coarse. I personally owe more than my house is worth with the declining values. HOWEVER, that does not mean I am going to go into default and I sure would not expect the lender to forgive the difference.
The proposal is too broad. I favor allowing folks with sub-prime mortgages to refinance at the current 30 year rates, and if they still can't afford this they should just lose the house (or rent out rooms for payment assistance).
Isnt that the option that they currently have?
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