As we all know by now, underwater is when the owner's mortgage is more than the value of the home. Of course that definition assumes that an owner could find a buyer at some price, which to make matters worse, is rare. Therefore, we have bank foreclosures and short sales and more. One school of simplistic thought is - it's the owners problem because he purchased a house he could not afford. I disagree. The drop in home prices was an economic problem that the owner did not create.
The central issue is that Obama has bailed out the lenders, but has done nothing for the people who are stuck with making the actual payments on the mortgages. The lenders make out at both ends. They get rewarded for making a toxic loan, like it was not their fault, and still have the opportunity to get payments from the person the lender made the loan too.
The unfairness, of Obama's bail out the lender's solution, screams to be heard. Yet no one has proposed any solution for the underwater owner as he drowns in the moral dilemma of walking away from paying the mortgage, perhaps exacerbated by an economy that has destroyed his job, and by an economy that put him underwater to begin with. Obama wiped the slate clean for the lenders by giving then a pile of cash.
"But wait, Mr. Webtalk, do not the lenders have to pay that money back?" "Sure and the government's other pocket lends them the money to do that."
My solution is let's wipe the slate clean for homeowners too. Until July 4, 2011, any owner can walk away from his mortgage - no lender, no negative credit impact, and no IRS recourse. Yes, I recognize that it is a simplistic solution. However, I thought simply giving the lenders a few hundred $billion, in a space of a few days, was simplistic too. If that is a rational response to the lender's problem, then my solution is a rational response to the underwater home owner problem.
You do not like my solution, then what is yours? I'm waiting.
Join me in my mission to Fire Obama.
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