[BigV]

That's a sad story, jinx.

My biggest complaint about this whole freakin debacle is the cnspicuous absence of a mechanism to balance the equation at the homeowner level. We have a very well established system for rebalancing a mortgage on a *second home* in the bankruptcy courts. Judges are empowered to call borrower and lender to the table and enforce a renegotiation of the terms of the loan, but, for reasons unknown to me, this power is not extended to cover loans on primary residences.

Why not? I would think that there is no class of borrower than residents who are more motivated to make it work! When I'm faced with getting the note paid or living under a bridge, I'm alllll over it. But for a second home, that same motivation isn't there. Why wouldn't you want to extend the same set of options to the borrowers for primary residences???

Because now, let's say someone doesn't pay and the home goes into foreclosure. Imagine that the mortgage is one that has been purchased as the security behind one of these corporate notes that have rapidly fallen out of favor. So we the people own the note and we're not getting paid. What now?

Foreclose? Kick them to the curb? Wouldn't the homeowner possibly think, no wai GWB is gonna boot me out. I'll just stay. That might happen, sure it could. Now we're not getting paid. Dammit.

Or.

Or we decide to evict him. Now we own the house. Who's gonna mow the lawn? Who's going to sell the house? Who's gonna buy it? And for what amount? A foreclosure sale is often offered at the loan balance, but the previous homeowner couldn't afford that rate, maybe the market isn't there. So we have to lower the price. Now savvy cash rich investors/speculators sensing that the market is heading downward would what? Wait, of course. Until the price goes down even more. Now we have to sell at some discount.

Why didn't we just DO THAT IN THE FIRST PLACE WITH THE FREAKIN HOMEOWNER? We could have saved all the processing bs and cost AND had a homeowner taxpayer stay in the home, helping keep the fabric of our community and economy stay knitted together.

These kinds of decisions are of course all case by case basis only. I don't think second homeowners should have any such benefits. Or at least back of the line buddy. Let the resident borrowers principal residence people, let them come together with the lenders (US) and work it out.