Counselor characterized the result best. This is simply adding order (at huge taxpayer expense) and yes (it appears to hell with moral hazard)…
From a practical perspective show me anyone in the government who is not pulling for this.
Anybody? Does anyone have any names?
This post was not meant to say that this will prop things up at all. Yet to think that this will not affect the depreciation cycle at all is a true fallacy. In my opinion it creates a huge moral hazard but haven’t we already breeched that levy? I mean come on now let’s be practical. I was hopeful that by now we would have already seen several lawsuits challenging these workouts and I haven’t seen or heard of a single one!
Huckleberry, go to the links I posted. Go read about this FDIC chairperson. Let me tell you something my friend, if it was up to Barney Frank HELL YES the maid would get to stay in the damn home.
What sort of backlash will there be? Well let’s see, we have recently seen our congress pass a bill that was rejected by a SUBSTANTIAL majority of the population. Doesn’t appear to me that backlash is really on anyones mind right now. There is a short sale right near me in Scripps on Chardonay. The guy has a freeking 30 foot boat right in front of the house along with his RV. I WISH there would be a backlash and frankly I am amazed there has not been.
Regarding the recession, yes I believe, as I have said, that it will act as a major counter balance. Yet REGARDLESS of who is president, it is in no way inconceivable to me that there could be federal intervention to laid off individuals that they cannot lose thier homes.
Tell me, would this surprise you?
The only surprise to me is that there is still this belief by many people here that things like moral hazard will prevent the government from taking any steps. That the government will or will not do something in the interest of the people. That is so far from the real agenda of the government that it is almost laughable.
There is not any question whether this is right or wrong morally, or whether this will help or hurt pricing… It doesn’t matter. It is what will happen. It will reduce the foreclosure inventory. It will NOT halt the cycle but it WILL change the cycle.
(and yes these people don’t get write downs or rate mods for free. any profits I believe go back to the government or entity that provided the relief)
