“I thought foreclosure *was* the bailout. It relieves the debtor from the responsibility of paying off the debt, and the house is given to the lien holder, the bank.”
Even a foreclosed property must be maintained, taxed,etc…while just sitting there sliding down in price. Not to mention the money already lost via HELOCs used to finance extravagance.
“If this double-bailout is in effect, it will only serve to keep prices inflated.”
Prices cannot be sustained if no one (ie the middle class) cannot afford to buy.
Unless…the goal here is for a paradigm —middle class home ownership as generational indentured servitude.
The problem for all this blood sucking is that..people who do not have $ cannot spend $. Or ” you can’t squeeze blood out of a turnip.” And credit only goes so far if you aren’t paying back. SO to the extent that you are strapped to your house…you cannot spend in other areas of the economy.
THerefore – this current housing market will suck the life out of the middle class unless it falls way down to traditional workable fundamentals.
