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View Diary: Charlie's Thoughts on President Obama's Housing Relief Plan (5 comments)

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  •  A question about how your plan would work. (0+ / 0-)

    Would the lien stay with the property?  Suppose in your example the original homeowner sells for $150,000 after refinancing, then the new homeowner sells it for $280,000 in the future.  Would anything be due back to the taxpayers in that case?

    •  That is Problematic... (1+ / 0-)
      Recommended by:

      If the lien stays with the property the effective value of the property will always be $50,000 less to the borrower.

      If the lien is forgiven at sale, I can see a cottage industry develop to buy houses at or below the lien price to relieve the borrower of the lien.  A sale to a relative or friend would save you $50,000 even if the market were higher than the sale price.  And you can't trust an appraisal, because some of the houses in foreclosure had phony appraisals.

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