Oh goody. This will stabilize things. Let’s put people who can’t afford their mortgages in 40 year terms at 3%. Hell, why not put them in 80 year terms? Why don’t we just PAY them a salary to live in their homes?
It appears that Governor Schwarzenegger has never heard of the Fifth Amendment.
The banks have a property right to foreclose on people who do not make their payments, and the government has no right to interfere that contractural right without giving the banks “just compensation” for the taking of their property for those 90 days.
The 90 days will come and go, and people who are in over their heads in debt will still be with us, still living in houses they can’t afford. Meanwhile, the government will figure out how to loan debtors more money to help them get out of debt.
Translation - Another 90 days of free rent for those that haven’t paid rent for 6 months.
“Gov. Arnold Schwarzenegger on Wednesday proposed a 90-day freeze in government spending.”
If people are rightfully put out of their (bank’s) houses, what will the result be? Will the mortgage holders just spitefully burn down the house? NO. Will Warren Buffett buy them all to warehouse his money? Not likely.
Other people who can afford those house will buy them and move in. Net result: no change. People will be living in those houses. People who can afford them. Ans house prices will settle to real level rather than pretend level that bad lending practices created.