Tuesday, July 10, 2012
Desperate times call for desperate measures
Every second home in San Bernadino County, California, is underwater, meaning the homeowner owes more on the mortgage than the house is worth. It has been clear for some time that the best way to keep troubled homeowners in their homes is by reducing the principal on their mortgages, thus lowering their debt burden and more closely aligning their mortgage with the actual value of the home. Local authorities should buy underwater mortgages using their power of eminent domain [compulsory purchase in the UK] â€” and then write the homeowner a new, reduced mortgage.