DougM

New Mortgage Bankruptcy Bill Does Not Address Real Problem

I agree this cram-down idea is terrible and likely to backfire. Plus all of us who didn't overpay for houses, didn't buy houses we couldn't afford, are paying our mortgages on time, or (heavens to betsy!) renting are effectively screwed to bail out people who were greedy, foolish, or both. A better idea might be to allow the banks (or government) to have an option-like ownership stake in any house where the loan is crammed down. If the homeowner ever sells, the bank has a claim on a portion of any profits above the loan balance.