Mr kumar

How to Help Both Homeowners and Lenders, at No Public Cost

i think this solution is not practical either, there are a lot of questions remain
True the lender gets a certificate, how can the lender sell it in the secondary market, and who is going to buy it.
How does it get securitized, how are investors going to trust these sub-prime warrants.
Do the current home owners get a loan that is equal to the market value of the house? , if they dont qualify then do they get a loan that they actually qualify for based on their income ( this will lead to a much bigger valued certificate )

I think none of such approaches help in the long run, because the truth is that home prices have reached an unsustainable level at most places.
They are not sustainable in relation to incomes and assets in most areas

I think the best way , is to let free market forces prevail, the home owners who are under water right now , do not have a lot of stake in the house , since they havent put a lot of money down MUST walk away from their homes and rent instead. Its better for them to hand over the keys and cut their losses now , since they will be paying more towards interest and little towards equity anyways.
The lenders, investors in mortgages , speculators must take the fall for this, some genuine unfortunate home owners will be effected, but thats unfortunate.
Any bailout , plan etc , will lead to bigger problems later on.
Its better to suck it up, take the loss, learn and move on.

I am sick of the financial induced bubbles that have been recurrent recently, it seems to effect every one else except the perpetrators of these non-sense.
The bonuses of these wall-street whizards keep going up and up, whether the company is going good or doing atrocious as whats happening now, thats because they KNOW that they will get bailed out all the time. Its time that the govt must not intervene and let them pay for their stupidities

kumar

Kumar