Hypothetically, lets say a home that sold for 650K in 2006 is selling for 450K in 2009. So lets say I jump on that home and buy it at 450k. A bunch of my neighbors bought in 2006 and were bailed out due to a program like the one mentioned above. Because of a bailout like this, how does it work? Does my neighbor have equity if he sells at anything above his bailout price point (Say he bailed out when the comps hit 450K)? Or is he on the hook for the balance that was “bailed out” by the govt? I would hate to think that people in my neighborhood have equity or no obligation for their stupidity, especially when my tax dollars are bailing them out.
Im angry because Im not exactly sure what this does to the San Diego market I have been patiently waiting out for two years. I want to see another 15% or more and feel its possible in selective areas but am unclear on the effects of programs like these.
