[quote=DaCounselor]”I also don’t see govt wiping the slate clean on principal owed by just writing down the loan amount and giving the mortgagee a “freebee”.”
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But this is exactly what is going to happen. Whether the govt. buys the loans and writes down the balance or subsidizes privately held loan write-downs, the result is the same. And this is where we are going to end up.
Without principal write-downs there are going to be a landslide of foreclosures/walk-aways – ability to pay or not – on top of the foreclosures we already have. There are plenty of influential players who know this to be true. They are just not going to sit back and let this happen.
In fact, I don’t know that I have seen a single piece of legitimate evidence that suggests that we are not moving, and quickly, toward this type of individual homeowner bailout.
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So, basically what you are saying is the govt is going to do a “workout” with the maid that makes 30K a year but stated she made 130K. Through these programs, she is going to get a principal write down and stay in the house she bought…???
So, what kind of backlash do you think there is going to be when the average citizen looks down the street and sees that his neighbors, whom make 100K less than him own a house just as nice as his, and he is helping pay for it through a write down?
