I’ve been hearing a lot of talk in the comments section about the pressing need to pursue principal reductions for underwater homeowners. Apparently this blog gets more attention than I realized because the idea has finally penetrated the thick heads of some members of Congress. I’m sure now matter how the eventual debate on this topic goes it will be a fun battle to watch. Here’s what’s happening now:
The FHFA has been requested multiple times to turn over its study on what effect principal reduction would have on the housing market. The FHFA has, of course, refused to turn over any information, we can all assume because it might actually support doing it. So some members of Congress are suggesting to subpoena the information. It seems the Federal Reserve thinks there’s some merit in principal reductions, a good number of Congressmen do, and certainly some homeowners think it’s great.
On the other hand, people are worried that the cost of this thing will eventually hit the taxpayer. Which means other homeowners who are actually keeping up with their mortgage payments will feel the hit from those less fortunate. As in any tough economy there are hard decisions that need to be made. But no matter what I think the information needs to be made available to everyone.
We won’t gain anything by hiding from the truth so let’s look out housing situation square in the eyes and see who blinks.
Do you support principal reductions? Do you think they’re the worst thing that could happen? Leave a comment and tell me why.