Comments on: Mr Mortgage: My Case FOR Mortgage Principal Reductions

By: Kevin

Kevin — Tue, 06 Jan 2009 16:20:44 +0000

Loan modifications are fine. Principal reductions are not. Let them do 40, 50, 60 year loans if these “poor homeowners” really want to keep their houses.

By: JackTar

JackTar — Mon, 05 Jan 2009 22:02:51 +0000

Not property taxes since they are tied to declining property values. My property taxes went down last year and will likely be reduced again this year. So the government will be looking for new sources of revenue. Howbout a sales tax on rent? Sounds good to me and you don’t seem to be concerned about it either. Just as long as we don’t allow a loan modification under any circumstances.

By: Kevin

Kevin — Mon, 05 Jan 2009 21:29:08 +0000

I can accept higher property taxes. Is that it? Is that the horror that’s so worth avoiding that we should just give trillions of dollars to the most irresponsible borrowers out there? Oh the horror, higher property taxes!

By: JackTar

JackTar — Mon, 05 Jan 2009 21:14:04 +0000

Your probaly going to paying much more in taxes (at least in California). Declining property values equate to declining property tax revenues. Sales taxes are going to rise, new taxes on previously untaxed services, new fees (taxes) will sprout out of the woodwork. The legislature can possible see its way clear to cut any spending. This is one of the consequences that will affect mortgage debt slaves and renters alike. Accelerating foreclosures will only compound this problem.

By: Kevin

Kevin — Mon, 05 Jan 2009 14:43:26 +0000

JackTar, I’m a taxpayer. What relief would I get? Let’s see… I didn’t buy a house I couldn’t afford, I don’t owe more thank my house is worth, in fact I’m a renter and don’t own at all. Answer: I get ZERO relief and will pay for idiots’ mortgages with my tax dollars.

I see nobody thus far has said they support tax payer subsidized principal reductions that wouldn’t personally stand to benefit from it. My theory thus far holds true then. You all in favor of this disgustingly immoral plan would essentially be receiving checks for hundreds of thousands of dollars. How noble.

By: JackTar

JackTar — Sat, 03 Jan 2009 19:11:18 +0000

“Let the market work.”

The banks (and others) have already been bailed out by the taxpayer. Why shouldn’t the taxpayer get some relief as well?

By: I like to lick things

I like to lick things — Sat, 03 Jan 2009 06:43:04 +0000

The best thing to do is to do nothing. Let the market work. What kind of message does it put out if we use taxpayer money to reward the greedy liars who fraudulently bought a house they could not possibly afford? Let them rot I say.

By: Jacktar

Jacktar — Sat, 03 Jan 2009 05:42:03 +0000

“why not just mail cash to every person in the country?”

Probably would have been cheaper and less complicated if the guvmit just paid off everyone’s mortgage thereby freeing consumer spending power and recapitalizing the banks at the same time. I’m sure someone here will point out how the TARP is a superior plan..

By: Jacktar

Jacktar — Sat, 03 Jan 2009 05:09:22 +0000

I guess my take on principle reductions is more pragmatic. The RE market (right now anyway) is the foreclosure market. Additional foreclosures will with have a downward effect on housing prices. If I held the note on a house and my options were to either: A) get the property back and attempt to sell it in a depressed and over saturated market or B) take a haircut on the principle and continue to receive cash flow. For me, it’s option A (continued cash flow trumps).
Granted, their are many more variables to a real world calculus, but I think you get the drift.

I think Bert’s got it nailed from the borrowers perspective. If I’m over 20% upside down in a house, it’s a slam dunk from a financial analysis point of view to walk (after living rent and property tax free for as long as possible). This being a rational option with a non-recourse mortgage. Real life tends have many more intangibles in the mix. ie: wife loves the house/neighborhood, stigma, uprooting kids, etc.

By: Kevin

Kevin — Sat, 03 Jan 2009 04:28:41 +0000

“The essence of the benefit of the principal reduction is putting more money in the hands of the consumer in which propels the nation back to recovery.”

Hmmmmmmmm…. why not just mail cash to every person in the country?

Oh yeah, just those that gambled on real estate.