Proposal:
Fed Chief Ben Bernanke recently told a community bankers group in Orlando that reducing mortage balances, rather than cutting interest rates or extending payments, might be the better approach to helping borrowers.
Concept:
Conceptually, I think it makes sense. Not sure how realistic it will be for lenders? But it could work in some cases.
Concern:
My initial concern is plain & simple - is this option fare to those homeowners who are currently making there payments on-time(regardless of loan type). I am sure that there are homeowners struggling to make ends meet, yet maintaining their mortgage payments. What seems to be the most overlooked aspect of this crisis is personal responsibility of those individuals that took out these mortgages. Not every foreclosure is the result of an unscrupulous mortgage broker or lenient lending standards, for that matter.
Final Thoughts:
Many pieces went into making this mess and it is going to take many pieces to turn it around.
There's just no magic pill for the current ills of the housing market!
Principal Reduction: As a Means of Avoiding Bankruptcy
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1 comment:
And so they should be! I don't understand how the US has a mortgage crisis,its one of the richest countries in the world if not the richest. Why don't more people have insurance or even Mortgage Bonds this would have helped the situation wouldn't it?
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