2 people bought a home in 2005 in the same neighborhood for the same price 600k lets say. It’s worth only 400k now.
Person A makes 300k a year and person B makes only 70k a year. Person B gets a principle reduction and person A does not under Zandi’s plan.
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Not that I like Zandi’s “plan” but this is not necessarily true. For example, if Person B were making 200K when they bought and put more than 10% down, they would not qualify.
If you add one additional caveat to his plan such as not allowing a bailout to those who lied about their income, then this “plan” would apply to very few people.
