AEIdeas

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Discussion: (4 comments)

  1. The Communist Manifesto is for NOBODY having private property. Is that where we’re being taken? So it seems so.

    1. “so it seems”

  2. Dallasite

    I;m not a fan of the rationale behind this move my local governments, but the big lenders have no room to talk or try to throw their weight around: a) for years, they made, or greedily created and perpetuated a secondary mortgage marketplace to sell, mortgages with *NO* equity/down payment, and b) they have refused and hindered and delayed all efforts to fix or resolve the problems those lending practices created, on either a small or large scale. If you keep resisting long enough, other ‘players’ will find a work-around – just like banks do when/if the government imposes new lending restrictions.

  3. James Richard Tyrer

    This clearly goes too far. However, there have been reasonable proposals that lenders that made loans based on highly speculative values should take a “haircut” on them which would actually be better than the potential losses on a foreclosure if they didn’t have insurance. And, it is the Fannie and Freddie loans that are probably the ones that should be targeted first, then those insured by them. A reasonable plan would be a maximum 20% write down with a refinance that was a true ARM tied to a US Treasury issue.

    While in the future, a higher down payment might eliminate the underwater problem, it is more to the point that lenders are the ones that can prevent speculative bubbles by refusing to make loans based on speculative values and in effect requiring a down payment that makes up the difference between the actual value and the speculative value.

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