It sounds so easy, but what happens when people are given reduced payments, balances brought into line with current values, and values go back up [I Pay My Mortgage: What's in the Housing Bailout For Me? usnews.com]? Does that mean they will have a tax liability based on the amount they were forgiven? I am riding it out but when values go back up, the people who had principles reduced will basically be riding on a windfall. A thousand dollar bonus, if you keep current on your mortgage. Wow! People who have done the right thing, not gone crazy borrowing against high equity, are now being penalized for proper behavior. When are we all going to realize you cannot borrow your way out of debt!
Comment by El Kingston of CA
Who cares if the house next door goes into foreclosure! The first question you need to ask yourself is why did you buy the home in the first place? I didn't buy my home to sell it; we didn't buy it get an equity loan; we bought it to live in it. So at the end of the day it really doesn't matter what it's worth. I'm not moving and don't care. No taxpayer should pay someone for their neighbor's mortgage, medical, dental, or any other darn bill. Pay your own bills, worry about your own mortgage, and live within your means. No one should bail out anyone.
Comment by Gibby of WA
I agree that we are in serious trouble and that the housing market must be turned around before the economy can take off. I am worried, however, about the precedent we are setting regarding the acceptance of personal responsibility for your actions and decisions. We seem to be saying that it is OK to make bad decisions because if enough people do it the government will bail you out. I think we should help those in need, but they should still be responsible for their loans, no one should get to walk away. My second concern is that we are dumping huge amounts of money into the system with little or no thought on how it is to be spent or what the long-term effects will be. The stimulus may be needed now but it must be coupled with a plan to withdraw government support as soon as possible. I don't see any indication that this government is planning to do that. I am afraid that the result will be a case of "out of the frying pan and into the fire." We will spend our way out of a depression and flip right over into hyper-inflation. This economy has the real potential to act like a pendulum, which is pushed at the wrong time and therefore swings out of control.
Comment by Bruce Higgins of CA
The aid to homeowners who can't pay is keeping the housing prices artificially inflated. This means that even though both my husband and I work, we can't afford a modest home and so we are renting. We probably could have gotten into something we knew we wouldn't be able to afford, but since we are responsible human beings, we waited and saved and hoped that eventually the prices would come down. A 14 percent increase from year to year is ridiculous, and we knew the market wouldn't sustain it. Unfortunately, we didn't take into account that the socialist (Bush and Obama) administrations would.
Comment by Elizabeth of OR
Many people here are saying this plan bails out people who have made bad decisions, but notice that the qualifications say you must have suffered some financial hardship. In other words, if you had a mortgage you could comfortably afford but then lost your job because the economy is going to pot, then you qualify for assistance. (And that's assistance, such as a reduced interest rate, not a bailout, as some suggest.) It isn't for every idiot who bought a house they couldn't afford in the first place. Like it or not, we're dependent on our banks, and this is just another mechanism for preventing their collapse. It sucks, but letting them (the banks or the troubled homeowners) fail would be far worse.
Comment by Brian Stamper of OH