I've switched sides. I am now in favor of bailouts for homeowners, flippers, speculators, investors ... everyone! So if loans need to be written down (including in bankruptcy court), or interest forgiven, or interest reduced, or principal reduced, I'm all for it.
In return, each person being bailed out will sign an agreement to pay from any future sales proceeds, 80% of the profits to the lender who took the initial financial hit on the bailout. If they aren't willing to share the profits, then no bailout.
Paul
P. S. Although this is my original idea, I seriously doubt I am the first to think of it!
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4 comments:
They give up 100% of profits until the debt is repaid. If the profit is less than the debt owed then all profit goes to the bank.
If profit exceeds the debt then first the debt is paid back 100%, all remaining profits are split 50/50 with the bank.
Don't forget bailouts to foreigners. There's certainly going to be a lot of that.
Given that the investment banks were leveraged at least 30:1, we could probably bail out EVERY homeowner with a refi and re-adjusted principle, and still be besieged with bankruptcies, frozen markets, and more (bank/insurance/state govt, city govt/highly leveraged companies) bailouts.
What Jacob said, no profit till the amount forgiven is repaid, but I figured that would be part of the deal. It's common sense, isn't it?
Still not a good idea. It would just freeze the real estate market.
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