The Housing Crisis Remains Barack Obama’s Most Immediate Problem
Reader Comments
Non-recourse loans
I am amazed that mortgages would be non-recourse. In Canada, mortgages are recourse so that if you fall behind and decide to stop making payments, Banks may also come after your other assets.
Could the difference in lending practices be contributing to the problems in the US? Would there be more credit available if mortgages were recourse (allow banks to seize other asset)?
Why is nobody talking about the underlying mortgage and its terms as the problems with the industry?
Van
Stability in the housing market is key
Instead of bailing out wall street banks the government needs to stabilize the housing market. This 'bailout' will help everyone who owns a property in the country. What happens in Nevada and other such states is having a direct impact on ALL markets and the equity losses in dollar terms will be far geater than the cost of the 'bailout'. The only people who should oppose this are those who do not own property. The banks should start sending appraisal letters to each home owner - this might provide the incentive needed to support some government intervention.
It won't work..
The problem with saving many of these people in bad mortgages is that they have terrible financial histories. That is why they are "sub-prime". These people have demonstrated their inability to manage money. They also don't have the necessary income in many cases to actually pay for the house. Therefore they are terrible credit risks. This isn't true for everyone, but it is true for many of them.
And if my property has declined in value by 20% why should I pay for other people's mistakes? Why doesn't the FED lower my mortgage as well? This just starts a never ending circle of bail out mania. We've already seen it with Wall Street and now the Auto Industry.
Three-point mortgage solution
1) Everybody pays THEIR OWN mortgage.
2) Those who can't pay, or don't want to pay their own mortgages, can rent.
2) Banks and speculators who lent money to those in 2) who can't pay or don't want to pay their mortgages, are out of luck. They lose.
Subprime
Best take care of the subprime debacle first! The hell with the banks (what is left of Wall Street). Other banks will rise in their wake. That is the nature of the capitalistic system. Wall Street created the mess, let those banks fall. In the end it will be cheapest way, after all the banks created the subprime instrument. Not the taxpayers. All the banking industry was concerned about was quick profits; high profile profits which is now everyone's expense.
TAKE YOUR MEDICINE...
Bailouts, for everyone. That's just great... How about just taking responsibility for your actions? Oh no....Couldn't ask everyone to just take their medicine and learn from their mistakes ...That's so "intolerant" and radical after all, we have become a nation of victims.
