Yep, they sure are. Look at it this way:
You and I have the same salary, same financial obligations, same job. I buy a $400,000 house I can't really afford. You buy a $200,000 house you *can* afford.
I fall behind in my payments, you do not.
The Government then creates a law that says the bankruptcy courts can modify the mortgages of irresponsible people like me, reducing my interest and principal to the point where I can actually afford the house.
That means the bank or institution that holds my mortgage note is now screwed out of the principal and interest I agreed to pay when I signed my mortgage note. I get a huge financial break.
You on the other hand, aren't eligible for any such break because you did the responsible thing and bought a house you could afford. Not only do you not get a break, your taxpayer dollars are helping to modify my loan and reduce my payments.
On top of that, the bank or other institution that holds my mortgage has to make up the difference for their loss in my morgage somewhere, so they raise interest rates, fees, penalties, surcharges, and everything else they possibly can on their customers that DO pay in order to make up for the loss. You have a credit card with the Bank that holds my mortgage which they just took a huge write-down on. Your credit card rate which was 7.9% because you were a responsible customer is jacked up to 17.9% because of "economic conditions." (Note: Capital One just did this very thing to ALL it's low interest rate card holders for this very reason.)
I don't know about you, but I don't know anyone who's happy with that arrangement.
I've heard a lot of people arguing, even on this board, that the big banks are just getting what they deserve. This is the new America.
regardless of the idiots in the house, all those homes should be valued FIRST.
THEN and only then should the ability to pay become examinied.
can this person afford the home at real market value? if not they don’t keep the house. no subjectivity.
don’t forget it also wipes out all the credit card debt that was issued because they had a massivly over valued house.
What you just described is called "redistributing the wealth." It is the whole point of this transparent scam. Obama doesn't care about mortgages. He just wants to scour "excess" wealth from your white backside.
btw, the deadbeat with the 400K house thinks it's a fine idea.
CITI bank just pushed my rate to 18.99% or 12.99 + prime rate...whichever is higher. I will have a zero balance on that card by this time next week. I'm also paying off the balance of a motorcycle loan. I'm finished paying interest to irresponsible banks.