Mortgage Principal Reduction?

[Jim in CT]

Originally Posted by spence

I think you missed it.

-spence

No, I didn't.

Spence, here is what happened in the years from 2004-2006. Lots of speculators bought houses that they could never afford. They bought these houses with creative loans like ARMs and "interest-only" mortgages. The theory was, that when the mortgages re-set to levels that people could never re-pay, by that time the house would have doubled in value, so they could cash out the equity. Greedy people got caught up in that speculation, and the bubble burst.

(The other thing that was going on, was that your party was putting political pressure on banks to throw away accepted underwriting guidelines for who could get a mortgage. Brilliant, as it turns out.)

That's the same exact thing that happened when the tech bubble burst. But the feds then didn't say they were going to artificially re-set the value of tech stocks. Because messing with markets causes more problems than it solves, and in this case, it costs money that we don't have.

If these folks cannot afford their house, and they can't sell it for what they owe, there is a reasonable mechanism for that, it's called forclosure.

That you try to frame this in a way that makes it sound like you're doing me a favor, is both factually incorrect and offensive. Obama is re-distributing wealth in an attempt to buy vores, that's all this is.

Enough.