I dunno lookout….
There is a HUGE attempt to confuse the general population about what is happening, on the pretext of saving the little guy. If they do raise limits, it’s a #@(&^$! BAILOUT that will be at taxpayer’s expense….
Haven’t heard it called “amnesty” but in many cases the foreclosure decision was helped by the fact that the borrower owes more on the house than it is worth, can’t sell it for what they owe, better to walk away anyway.
What is the lender going to do with it ?, other than sell it for a loss and spend a pile of money in the process.
Real etstate agents get commissions for selling foreclosures too.
The govt AND lender would rather keep people buried in an overpriced home on the guise of “we want to help you” so keep paying your lender… (If the home was worth more, they wouldn’t be so willing to help) Call it amnesty, whatever, it sounds better than BAILOUT.
SO, raise the limits so they can keep a Californian buried and saddled with $600K worth of debt and interest payments, in a house with no equity. What exactly are you saving if you have Zero or negative equity ??
THE ANSWER is to allow foreclosures as necessary. We need a free market without intervention. Let the people who bought and couldn’t afford it know that it WASN’T an OK thing to do, and you aren’t going to get bailed out.
Let the prices fall until supply and demand kicks in, so those that KNEW they couldn’t afford to buy in the past and waited are rewarded with lower prices.
And if they REALLY wanted to help the buried homeowners , they would let the foreclosures happen, and the guy that owes $600K today can go rent for a few years, save up some money, and buy a house in the same neighborhood he has today (that he cannot afford today) for $300K and owe less at that time and still own a house. (probably wont save any money, that was humor)
Please tell me which is better for the govt protecting the system from collapsing… and which scenario is REALLY better for the borrower ?
The govt is (or should be) embarrassed, ashamed and scared, among other things.
The time for them to intervene isn’t in 2007, it was in 2002 when the 100% financing started.
THAT was the time for them to butt in and require a down payment.
Even with cheap interest rates, I can assure you that market would have never exploded like it did.
There would be happy homeowners today and there would be lots of tenants for landlords just like it supposed to be.
