Gilead: You don't get me?
I realize it may seem conflicting, however it really isn't. You have to draw the line somewhere. You drew it the original bail out. I didn't. I still say if they had not done it, the end of the world as we know it would have already happened!
However, principle reduction is not the same thing. The moral hazard issue is valid in both cases, but in this case, you can save that person and their home in other ways - such as lowering the interest rate, removing balloons and extending the term - or even agreeing they will give back the house to the bank and become renters with a lease. It is not necessary to obliterate the basic contractual premise that all of us enter into on a massive scale simply to avoid additional foreclosures and meltdowns of the housing industry.
I don't want those people foreclosed on and booted out. Laz is 100% right that vacant houses (and the like) are horrible for ALL OF US! It kills everyone's property values, increases crime and decreases government income (thus, services) and on and on. I want to keep as many as possible in their homes. It's just that principle reduction is an obscene way to go about it when there are other options as I prescribed above.
It's only a conflicting position if you don't recognize the fundamental difference in the two situations.
Len
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