More government bailouts for distressed home owners
... and some distressed home owners are refusing to pay billions in home equity loans.
Two interesting stories from the NY Times caught my attention.
I don't personally know what I would do if I was living in Florida or Arizona or other places where home values are now a fraction of their previous values and I was totally underwater on my home with little to no chance of getting back to break even in the foreseeable future.
But the government in their continuing effort to throw good money after bad is going to offer interest free loans of up to $50,000 to help eligible distressed home owners pay their mortgage principal, interest, taxes and insurance for up to 24 months. Read more.
And then there is the home equity fiasco where the banks are on the hook for trillions or gazillions of dollars taken out with the home ATM machine and is already spent while the value of the home, the collateral for the loan has disappeared. Read more.
So I'm not going to judge anyone as to whether it is immoral to walk away from their obligations or anything you can get away with is OK. As some point out, those very same banks got quite the handout too.
But all in all, I guess I'm most thankful that I live and sell real estate in Charleston South Carolina where current market conditions are so much better than many other places. Sure, homes in Charleston went up in value, there was speculation, overbuilding, bad loans, etc., and as a result there are foreclosures and short sales and sadly, people who lost their homes, dreams and a lot of money.