Recommendation for a different mortgage bailout plan
The professor in the video has some interesting facts and a creative solution to the current mortgage problem. Continuing to pay a large payment on a house that someone is 6 figures upside down in does not make financial or emotional sense. Some sense of motivation that they can participate in any price gains from the current market would cause home owners to less likely to walk away.
Even more entertaining would be the forced acceptance by banks of the program from any Freddie or Fannie insured mortgage where the home owner elected to participate in the program. Most of the pending foreclosures would disappear, the banks would take big write downs, but they would be looking at huge profits in the future when housing prices recover.
This is too out of the mainstream thinking for either the administration or the banking industry to actually consider, so we will continue to muddle along.
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