AOL - The loan modification programs have been a joke. You have a house that has tanked in value and the best the banks can come up with is a plan where they sort of delay what you owe long enough for you to get back on your financial feet -- if that -- based on the flawed logic that the housing market is certain to improve in just a matter of months. The real answer for what ails us is a Third Rail solution that banks don't want to touch: Erase some of the amount we borrowed, a process known as a principal reduction. To do so would share the burden of the housing crash with the lenders who helped create it. It would also allow us to get on with our lives, and, according to The New Bottom Line, save the economy in the process. Got your attention now, didn't we? The report adds: "Writing down the principals and interest rates on all underwater mortgages to market value would serve as the second stimulus that America so desperately needs, only without added costs to taxpayers." Amen to that part.
Look, I feel bad for anyone who's forced to foreclose on their house, and I'm sure being underwater on your loan is an absolute nightmare in this uncertain economy, but if banks just start giving away portions of houses for free, I, as a non-home owner, am going to throw a shit fit. I'll straight up be forced to leave the country.
Because that would be just a nice "Fuck You" to everyone who A) Has rented until they feel they're fiscally ready to take on a mortgage, B) Bought a place with a mortgage they could reasonably afford, C)Has already been foreclosed on. I'm guessing those groups make up a solid majority of the country, no?
Like if this is going down I want a bit of a heads up, I'll rush out there and buy the first half a million dollar house I see and just default on it a few months down the road claiming I can't keep up with my "recession era salary." I mean if everyone in this country is just going to start giving up I might as well jump on-board as well.
I get that the banks take some of the blame here for pushing mortgages on people they may or may not have been able to afford in the first place, but I still maintain that if you're not smart enough to figure out and budget for what you can afford on your own, you're probably not fit to be in the housing market anyway.
I mean you wouldn't roll into the supermarket and ask the butcher how much you can afford to pay for salami and then blindly pay it, would you? You'd be walking out of there paying $10 a pound for something worth a fraction of that, and if you're too dumb, naivie, or unwilling to figure that out on your own, then hey, that's your problem.
Same with housing.
