Carly Fiorina showed why she was run out of HP after nearly destroying that company. How can you say “we need to help out these people who can’t afford their mortgages because the value of their houses has fallen?”
If the value of my house falls to half of what it was when I bought it, that has exactly zero effect on my ability to pay the mortgage. (Except that my taxes will go down.) It does affect the bank’s ability to recover their money if I default, and that is the core of the current financial crisis. Government buying the houses to keep poor credit risks in them does not change anything, and it will pervert markets and set very dangerous precedents and incentives - I would say worse than the ones we are reaping the fruits of now.
If the value of my house falls to half of what it was when I bought it, that has exactly zero effect on my ability to pay the mortgage. (Except that my taxes will go down.)
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Actually your taxes may not go down. Our County Assessor explained that the rate of taxation on homes is set to meet the county budget so if all homes are worth less they will simply tax more per assessed value to meet the budget of the county. I pay almost $5000 a year now in property taxes for city and county.