Well, if you said pay or the gulag, that might work.
And the enumerated power specified in the Constitution which allows this transaction is found in what paragraph?
I didn’t think so.
This is an interesting proposal for stemming the coming tide of foreclosures in non-subprime categories.
Although interest rates are falling, many homeowners who bought in the last five years cannot refinance because lenders (now) require a 80% LTV. When a home has lost 20% of its value, as many have, the owner can forgetabout refi.
Offering a separate loan, as suggested here, might work. Thoughts?
You help people by making them help themselves.
/s
A: Don’t.
They need to learn a lesson.
Don’t do anything. They knew what the payment was going to be. If the value drops, just don’t borrow more until it comes up or the balance goes down.
If you were stupid enough to get funny financing, get a couple part time jobs so you can make those payments you signed for. Or file bankruptcy and move out.
Heck, the way we are headed they will be paying us to borrow money pretty soon, that should help. sorry, its Friday afternoon.
Shall we protect everyone from the consequences of their actions everywhere and always?
What is this, Kindergarten?
I am in this situation. It’s really fuggin ugly. No Mortgage company or broker will touch you, and the bank REALLY does not want to talk to you.
From my perspective, I am screwed. I pay my Mortgage, I get screwed because I can’t sell. I don’t pay my mortgage and I get my credit screwed, and I have spent the last 6 years trying to recover my husband’s crappy, flat out crappy, Credit score to now face this.
I am telling you....... It really f’ing sucks. And we bought with EQUITY already in place. JOY.
Just why is it Mr. Feldstein’s perogative to debase the savings of those Americans who live within their means to the advantage of those who don’t?
Why stop at mortgages? Are the Feds gonna’ guarantee the “negative equity” on car loans and credit cards as well?
short sale
The bubble prices were unrealistic and any attempt to recreate the bubble is silly.
This is a dumb idea. You can’t cure excessive debt with more debt. Furthermore, nobody in their right mind would sign on to a “full recourse” loan. Now, if people walk away from a bad mortgage, the bank gets the house back and that’s it. Of course, your credit’s ruined for 7 years but so what? Banks won’t be lending money for at least that long anyway. Right now, a good credit rating is worth approximately 1/2 a bucket of spit. With a recourse loan, not even bankruptcy can eliminate it. The borrower will be stuck paying with wage garnishments till the cows come home. So where’s the incentive to do this?
Collectively we are all underwater. The total of all Government debt has now eclipsed the total household net worth of the entire county.
Most states already are recourse. Some of the more notable, former bubble markets are non-recourse, particularly California. This proposal might fix things on a macro scale if everyone complied, but back down on the individual level, why on earth would a homeowner voluntarily be put on the hook, if their current mortgage allows them to walk away with no other consequences other than bad credit? If they’re in bad enough shape to participate in such a program, their credit is wrecked anyway.
This has echoes of the bankruptcy reform from a few years ago, that benefitted the credit card industry so mightily, and is raking strapped card holders over the coals with universal default. That’s all coming apart now, and is about to be reversed to some extent.
If they’re so all-fired determined to fix the problem, offer one time subsidized loans for “troubled” refi’s and purchases of troubled properties, with an extremely attractive rate, that is fully assumable, and make up the difference on forced short sales, within limitations to minimize abuse, on a primary residence only, with very strict guidelines that are enforced. No noncitizens, no sketchy ID, no straw buyers.
I can’t believe this ****. I mean I had a house which I had totally rehabbed and had to sell at a loss in 94 with the mortgage insurance taking up most of the slack and me having to pay a 4k deductable and nobody was talking about helping anybody upside down in mortgages at that time, people were simply walking away from them. How do I get to be one of the people that anybody in government actually cares about??