Comments about ‘In our opinion: Underwater mortgages dragging down the economy’

It seems to me that marriage has been redefined many times in history, including right here in Utah. So what was the result?

Why don't all Americans simply follow the lead of Senator Mike Lee and just leave the banks hanging?

I think the cause and effect relationship in this article is wrong. I think it is the poor economy that made the underwater thing happen.

The article says:

“Many of these homeowners may not even be aware of their situations. They continue to pay their mortgages on time each month. Still, these mortgages are a drag on the economy“.

I can not understand how a proper operation of a commercial transaction is a “drag on the economy”.

I also don’t know very much at all about how the mortgage system works, but I don’t think banks hold mortgages.

And without knowing any of the details of the solution proposed to solve this “problem”, I know the businesses behind:

“It would require Congress to change the rules to allow for contingent write-downs and equity sharing.”

Would be the ones to profit from it’s provisions and the homeowner would be the looser.

Further, it would do nothing to help the economy.

My comment here was misdirected. It was posted on another item and it showed up here.

underwater mortgages == unemployment == Obama policies. If people are able to get jobs where they can then pay their mortgages the problem takes care of itself - nothing else matters. Until unemployment drops back into the 5 or 6 % category nothing is going to move forward with the housing market and that unemployment number isn't going anywhere with OBama in office. Pretty simple.

While I don't disagree with the overall premise of the article, I think the data might be skewed a little bit. In order to really assess the number of dangerous underwater mortgages, you've got to adjust out all the newer ones. With closing costs and the high amount of a payment going strictly to interest, it's not uncommon for a new mortgage to be underwater for a while. That doesn't mean it's under any particular stress.

Time to start being like Italy, and putting all our homes on floaters.
That way they will not be underwater.
But seriously, homes cost too much
it all starts when local government assessors overvalue homes, because they want more property tax.
So if government is going to put homeowners under the water, then they need to provide floaters.

I just heard on the radio today that inflation went up last month in Utah primarily due to the cost of housing or higher home prices. So I guess that is a start.

Declining property values are a huge drag on the community. Because property taxes fund things such as school and city services, these services have been cut, wages have been stagnant or declined. The buying power of teachers and others in the city-service community has been lessened and this ripples throughout the community. It is posh at this time to rag on the public sector employees but the public sector do perform valuable services and they do pay taxes and they do spend money when they have it. But this would be one example of declining property values and underwater mortgages are probably hindering local economies for sure.

To Patriot

You mentioned the wrong President. The mortgage crisis happened on President Bush's watch. While you may not like President Obama's policies, you can't pin the mortgage crisis on him. For some reason Utahns seem to forget history when it comes to politics.

As to the comment made by someone about banks not holding mortgages, that is one of the problems. If banks had been required to keep the liability of the mortgages they made, we would not have had the crisis. The fact that they could bundle the mortgages into complex derivative instruments, and pass the liability to some unknowing investor led to unbridled GREED in the mortgage industry. It is too bad that so much regulation is needed in this country to keep folks honest,( Romney wants to cut back regulation ) but for some reason GREED always trumps morality.

An interesting concept. As one of those who is grossly underwater and religiously paying on a mortgage, I well understand the problem, but don't know what the big answer is going to be. I love my house. I invested all my available cash in it as a down payment. I put 20% down, but my $249,000 house is now worth $183,000, so I am underwater. The neighbor who refinanced his very similar house for $374,000 caused all of our taxes to go up and then he was foreclosed upon. I think any equity sharing plan would have to have time and amount limits. The banks have already profited handsomely, or at least their executives, from government bailouts. I don't think they deserve more. This one time we need to do something to benefit middle class folks. I am too old to start over and too tired to keep paying with no reward.