Is this mortgage-modification idea practical?

[quote=“md2000, post:20, topic:553285”]

That’s kind of full circle, and what the government’s trying to encourage via principal write-downs, without all of the associated expense. If a house with a $200,000 outstanding mortgage is only worth $130,000 on the open market, then there’s no way that it will go for more than that at a foreclosure auction. And if you’re one of the people that got themselves into trouble due to your inability to comprehend “balloon payments” and so forth, the government is providing incentives toward that end. The banks (correctly) won’t deal with people that can still pay, and as a result in no-recourse states, people can walk away. People in recourse states can only (a) subsidize the irresponsible, (b) subsidize to a lesser extent the non-recourse people, and (c) go through a Chapter 13 that they don’t really need to go through just to stick it to the banks (and ultimately the intrusive government that can’t let failures fail).

Minor nit there Balthisar: Due to a formatting error your post makes it look like I wrote something I did not. That was md2000’s work in post 20 you’re quoting, not my work from post 19.

No harm no foul, just setting the record straight.

Dang, my apologies! (Must… use… preview!)

Yeah, that’s always the problem - if you give the ones who can’t pay for their overpriced house , then the ones who are doing fine but have overpriced houses will ask “what about me?”

Sorry, we have to penalize you for being financially responsible. (But then, isn’t that what welfare does too?)