Question Details

Walstmnky, Home Buyer in 07093

Bernanke to Lenders: Reduce Principal

Asked by Walstmnky, 07093 Tue Mar 4, 2008

Fed Chairman BB called for lenders to reduce principal on homeowners w/ negative equity.

I am curious what the RE professionals, buyers, and sellers on this site think about this proposal.

Some specific questions:

A. Is the proposal a good idea? Yes, no, maybe? Why?
B. Would the banks do it? Why would they do it?
C. If some banks decide to do it, would we see an rise in not-so-truthful appraisals, valuing the house lower than market in order to get as much principal reduction as possible?

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