Just when you thought it could not get any better, news today is that Edward DeMarco, head of the Federal Housing Finance Agency is under pressure from the House Democrats to reduce principal balance on mortgages of homeowners who have filed Chapter 13 bankruptcy protection. So if someone has used their home as an ATM (ie, pulled out all their equity and spent it on who knows what), they should get protection that if they file bankruptcy they should still be able to keep their home and owe less money on it than the rest of us who did not take out our equity and have not filed for bankruptcy but are out here working hard to keep up with everything??? What kind of a world do we live in?
It seems that our society is at a point where it is paying those who are not responsible and penalizing the ones who are responsible. The hardworking people who work hard to earn a living and are not filing bankruptcy, trying to hang on to their small companies without being taxed harder and giving up get no breaks!!! This is another benefit that we all will pay for dearly in the long run, because unbeknownst to everyone who is taking out he handouts, someone is going to have to pay for them in either higher taxes or bank fees. The banks cannot continue to write down principals and keep people in homes for 2 or 3 years who have not made payments. Fannie Mae and Freddie Mac are the government and that is us that is going to have to pay for this!!! With the known inventory of shadow homes being about 50% again as large as all homes on the market, what will we do when this inventory finally hits the market??
In case all of this is too unbelievable to you, here is the articlehttp://www.americanbanker.com/issues/176_246/fhfa-fannie-freddie-bankruptcy-1045074-1.html
When will the madness end. The market just needs to play out the situation and the government needs to stay out of the private sector. What do you think???
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