A Solution to Foreclosures

Expanded thoughts on helping the economy, this time with Tamara's two cents as well...

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So that's our input. Here's a challenge, dear reader:

What would you add/change to this to strengthen it and make it more likely to succeed?

by Brett Rogers, 5/6/2008 2:52:16 PM
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This is great, but perhaps the tax break should relate to hours worked. I see the slacker types just adding one six-hour shift at a coffee shop to their 24 hours worked at the mall. I've gotten quite cynical, especially about gen y'ers recently added to my life, who really just want to work as little as possible. These kinds of people don't take any pride in a job well done, or a job done at all. In fact, they seem to take pride in doing the least amount possible. There are LOTS of these people. It's scary. I'd just like to see ALL of these handout programs done away with, and stop enabling this behavior.

Posted by Annette (dmartinigirl.blogspot.com), 5/7/2008 9:47:19 AM

The tax break relates only to the hours worked in that it only applies to the second job. Perhaps I didn't make that point clear enough...

And yes, there are lots of those people. Mighty scary...

Side question: What would society look like when there are no handouts to anyone from the government?

Posted by Brett Rogers (http://www.beatcanvas.com), 5/7/2008 9:52:45 AM

I'd like to see something added for the lenders here. It wasn't just the consumer, lenders also had some questionable practices as well. It isn't in anyone's best interest to foreclose so how about as a first option, the lender attempts to re-negotiate the mortgage based on a current fair market assessment? If the borrower can afford those terms then move forward together. They'll have to do this anyways if they foreclose. If the borrower can't afford those terms, then look to Fannie as an alternative or let them out of the loan with a reduced foreclosure penalty (I'm not sure how long it is before you can apply for a new home loan so please forgive my ignorance here - just floating an idea).

I like letting the market take care of itself here with as little government involvement as possible.

As for the tax break, how about expanding that to overtime income and include social security payments in the break? It won't do anything for people like me (already salaried and work what would be equal to a 2nd part time job), but could help the manufacturing sector (both employees and businesses).

Posted by Pale Rider, 5/7/2008 11:39:58 AM

I like the diretion of this. One pet peeve I have is the proliferation of specific tax free accounts - not that I like taxes but I have to segregate retirement from healthcare from education from housing - why not just one darn account with permissible purposes?

What do handouts accomplish? In many cases they simply remove or mitigate negative consequences to decisions - it seems to me Govt programs are designed and many politicians are trying to remove any and all negative consequences to decisions. I have heard anecdotally that there are some folks who have purposefully put off buying a home because they felt that prices were ridiculous - and have been waiting for values to come down - if we prevent or try to mitigate foreclosures are we essentially propping up the market? Are we inadvertently causing prices to remain higher than they should and continuing to lock out precisely those folks that we have been talking about that delayed gratification?

Posted by Rich, 5/7/2008 9:41:22 PM

Pale Rider - one additional factoid which you'll love - if part of the debt on a mortgage is forgiven - the lender would need to provide a 1099 and the borrower would be subject to income tax on the forgiven amount - how's that for ironic justice? So clearly this provision would have to be considered!

Posted by Rich, 5/7/2008 9:43:17 PM

Hey Rich, That is just mind blowing. I let out a combo "shake my head/laugh of disbelief." Is there anything that isn't taxed these days? Whoever came up with that tax law must be so proud.

Taxation is one of the things government is best at.

Posted by Pale Rider, 5/8/2008 2:27:44 PM