Quote Originally Posted by bartock View Post
...but if it were only that simple. Look at Lowell's post above. Perfect assessment - public risk and private profit. The banks charge PMI. Most folks who are underwater or who were sold loans they really couldn't afford paid PMI. Lots of it...in fact, earlier this year the ceiling on the amount of PMI that could be charged went up I believe 1/2 percent [[a HUGE windfall for the banks that flew under the radar), and PMI is now paid for five years at a minimum no matter what happens to the value of your home. So, on top of PMI protection, the banks get the $120 billion public charity, and are still able to foreclose on homes, guaranteeing no loss, and privately pocketing the profits, albeit paying back the "loans" with interest.

I think the banks should be able to foreclose on homes. I'm against the fact that the foreclosure is basically the third layer of guaranteed insurance against them losing a dime on any mortgage.
You can get around PMI by coming up with 20 percent down. In todays market there are literally tens of thousands of properties in the metropolitan area that you should be able to get into if you honestly save for that goal. A person who has a 20 percent or more stake in thier home is less likely to walk away from it. A huge number of the distressed properties on the market now are the result of those late night 'make money buy houses no money down' guys you see in informercials. These were bought by people who were motivated by greed and the lure of easy money. Unfortunatley, these folks were not the sharpest knives in the drawer and had little invested in the properties so they ended up taking down entire neighborhoods.