Re: "Column: The Persistent Housing Crisis Requires Bold Action" (Dec. 23)
The fact that an asset's value is at or below the debt used to finance it does not and should not require the debt to be arbitrarily and systematically reduced. There is not and never has been a guarantee (explicit or even implied) that asset values will not drop.
Should a lender be required to reduce the principal amount of a car loan because the value of the car dropped? Imagine!
Only a relatively small percentage of homeowners are "under water" and the vast majority of those are making their mortgage payments. Why? I suspect it is because (a) that is what they said they were going to do, and (b) they have to live somewhere, so why not pay for the house they live in?
This idea that the general population should pay the consequences of bad decisions made by a few of their neighbors is just wrong. Nobody put a gun to a homebuyer's head and forced them to buy a house.
Rather, many who bought homes in markets that were appreciating rapidly did so to cash in on the bonanza.
Banks that made bad investment choices likewise should enjoy the benefits or suffer the consequences of the loans they made. No bailouts for them either.
That is not to say that "bad actors" or fraudsters who misled or tricked borrowers should escape unscathed. Where the facts support prosecution, let existing law work and let it be done expeditiously.
But let's get off this idea that all of us should pay for the sins of a few. That is not equality — it's socialism.
David Motley, President
Fort Worth, Texas