Upcoming Foreclosures

Why can't the US Government help home owners reset their mortgage to the current value of their home?

I am more curious than anything as to why? So for example. You buy a home at $450,000 but your home isn't worth that due to the economy. Lets say its only worth $200,000 in actual value. Why can't home mortgages be reset to the current value that way monthy payments are reduced in half to keep home owners in their homes, help or stop foreclosures. I would like to see that happen than tax credits. And then the government can give all these tax cuts to the mortgage company's to make up for the amount they are loosing from the mortgage cut. Did I explain that right? Anyways I am just courious if this has come up, Why it couldn't being down, what damage would it cause, if any, if this would happen and so on. Okay..so please leave your thoughts regarding the topci! You are all just angry people and are not explaining anything fully. Lets vent else where..we are just talking here Thank you!

Public Comments

1. Simple... That was McCains idea.. Well T.G..Its not the homeowners fault in reguards to the many foreclosures.. The banks took a chance on their loans..So why the hell are we bailing them out then?
2. Slippery slope. They might also reset to the current value when your home value increases, would you like that?
3. A good idea would be for the treasury dept, which already owns 90% of the mortages in america, to allow homeowners to refinance their loans at the treasury's rate of 4% and allow them to stretch out their loans for 20-30 years. It would allow most home payments to be reduced by upwards of 30%.
4. Well if they paid $450K, somebody received $450K for that home and somebody paid $450K for that home...changing the mortgage to the current value would mean the bank (who wrote the check for $450K) would be taking a huge loss! Should the bank take the loss over the homeowner? It's no more the banks fault that the home lost its value than it is the home owners fault...so who should take the loss? In reality, if this was not a national crisis and we were doing things like they have always been done, both the bank and the homeowner would take the loss...which is how it should be. Buying a home is an investment and requires a considerable degree of risk by the borrower. Lending money also requires some degree of risk to the bank, which is why they charge extra interest for higher risk borrowers. Risk can pay off or it could cost you big...but you have to be ready for either outcome when you take that risk. I hope that helped answer your question.
5. Nice idea, but the total amount of loss to the mortgage companies would be way too huge to handle with simple tax breaks. The problem with the mortgage crisis, is that it is so huge.
6. It will not allow Congress to implement all their programs. Why not let every mortgage company and every homeowner fail like they should? The pain will be enormous, but in the long run we will all be better off. You could buy property at a discounted rate and build your own wealth instead of rewarding irresponsible behavior with your tax dollars. The responsible should be rewarded.
7. Should the government also refund money lost in the stock market? Or other investments? Should we send the message that no matter how badly invest, it doesn't matter, because we'll bail you out? You invested poorly. It's not the job of responsible people to save you from yourself.
8. Because you are talking about $200,000 dollars of debt, now times that by how many?
9. I have this problem right now - owe more to the bank than I could sell it for right now. It sucks... There is something called contract law that gets in the way. I signed a contract saying I owed the bank a certain amount - that amount is fixed. The only parties who are able to change the contract amount are the parties to the contract. Myself and the bank. The government has no say in the matter. If the government were to give me money to make up the difference - wow!!! That would be quite generous of them - would I need to pay taxes on their gift? That, indeed, would make the bank and me better off - less close to default. The concern with this though is that, with the free money from the feds, it would be reinforced to me that, if I wouldn't be restrained from making a bad investment again. I am not as big and slick as the wall street bankers or big auto to be able to walk into congress and ask them for funds.
10. Just what we need, more Government intervention.
11. Let's suppose you loan me $450,000.00 I'll invest the $450,000.00 you loaned me. (Don't worry I'm a genius investor) But six months later I'll tell you I lost all but $200,000 of the loan. (Ooops it can't be my fault) Would you want to rewrite our contract so that I don't owe you the $450,000.00 anymore, just the $200,000.00? (It must be your fault for loaning to me) If you answer yes I have some Nigerian business contacts for you. Uh uh Uh uh Uh uh Uh Shut up and drink the blue kool aid. Once your lips are sufficiently blue you will understand all that your messiah reads from the telepromter.
12. You know you are my favorite right? So I am not going to tell you the flaws in your idea BUT maybe offer a suggestion that would work in a similar way. With the homes that are in foreclosure why not offer 60 year fixed rate mortgages? Then the home owner can choose to pay around 1/2 of the payment they originally had. The bank still is getting their principal back (just much slower) and they will get a HECK of a lot more interest over the longer period of time too. Then IF the market goes back up the home owner can choose to sell and get out of their 60 year mortgage! I like your thinking it just is a little off on this one!