Sub-prime Bail Out

[Aliantha]

Originally Posted by tw

But everything you have suggested can and must involve those finance companies. Who is the at the center of these problems? Who holds those defaulted properties? Who prosper most if these defaults are removed from their books? Everything you have posted is corporate welfare for the most irresponsible financial institutions. I should not have to use the word again - liquidity.

The gov buys the houses from the finance companies at their current market value (much lower than the going rate) and then sits on the asset while recieving 'rent' until such time as the 'tenant' leaves. Then the house is either sold at a profit, or re-rented.

It's very simple really, and creates a lot of jobs in the process.

My $200,000 home is now worth $100,000. But I cannot sell it for $100,000 since my mortgage is $150,000. I cannot pay my mortgage, cannot sell my house for market value, and my neighbors are in the same position. To sell my home would make me homeless. My home must sell for $150,000 because of a liquidity crisis. I have no choice. Either that or bankruptcy. The market value is only $100,000. But it cannot be sold at that price. Again. Liquidity crisis. Please stop using economic concepts (law of price and demand) that assume no liquidity crisis. Stop making the same assumptions that those big shot finance experts also made to create this problem.

Those simplistic economic rules of supply and demand are based in assumptions that do not exist here. Again, I keep using the word because your posts ignore its significance - liquidity.

You shouldn't have been stupid enough to buy a house that you couldn't afford. Shame on you.