Troubling Story

How the housing crisis and reaction to it is crushing the spirits of regular middle class folks trying to play by the rules.

Dealing with the bureaucratic process of rejigging mortgage payments with all sorts of weird new rules and faceless/nameless organizations sounds like a complete nightmare. I had a similar situation, albeit on a much smaller scale, dealing with the City of LA trying to assess me a business operating fee when I did some independent contracting. I still hold the City of LA owes me $300.

I know this is naive and impossible, but it strikes me this mortgage business needs a quick, painful clean up. The "ripping off the band-aid" solution. The longer we kick the issue down the road and ignore the fundamental issues, the more complex and burdensome and nightmarish it becomes. It's like the person with credit card debt who starts transferring the balances all over the place to get better rates. It is totally useless and wasteful activity and does not address the core issue. With something as large as the mortgage crisis it just compounds itself, creating more useless side industries of government agencies "managing" non-bankruptcies, predatory lawyers and accountants helping navigate the new confusing and nonsensical rules and small print.

The way I see it, people ought to either pay their mortgage, declare bankruptcy, or renegotiate with the bank to avoid bankruptcy.

I don't understand why mortgage holders deserve a special class of debtors. Why are they entitled to rights beyond regular debtors and borrowers? Why are they entitled to "pay less" than say, student loan holders, or small business loan holders?

Homeowners get to keep the profits they make off their homes if the prices skyrocket. Thus, if the prices go down, they need to accept the losses. Sure, the market was manipulated and it wasn't fair. But so what? When the market was manipulated in the other direction (up), I didn't see a lot of homeowners giving the profit back. Sometimes life sucks and you need to take it on the chin. At the same time, you signed the loan. That was money you borrowed. Nothing more. On some level being "underwater" doesn't matter. You borrowed X, you need to pay back X. No one said prices were guaranteed to go up. Or maybe they did, but they were lying, and you gotta admit to being a bit of a sucker to have believed it.

I suppose I'm unsympathetic because I'm a renter and generally don't any significant debt and probably would feel differently with an underwater house. Nevertheless, I'm talking about how to solve the problem and I ain't volunteering to pay for all these various bail outs, so someone has to, I figure it is the debtor.