Those talking heads will do anything to get elected. Let's kick this can further down the road and point the finger at someone else when when everyone becomes a true bag holder.

Bottom up income redistribution. Adam Smith, Karl Marx, and Jesus Christ would not approve.

Jamie,
I am probably one of the few realtors in the world against another Home Buyers Tax Credit. I find the benefits are short lived and creates a false market. We need something that will give people more confidence in our market and an incentive to create jobs. Once people are confident in the economy they will start buying again.

Jamie - can you maybe pass this idea along to the powers that be. No property taxes ever, closing costs and zero percent financing for first time buyers (only). I think this is the only solution to keeping the current prices of homes double what they should be. Please float this idea out there.

Why not let 100% of mortgage payments go directly toward the principle for 6 months? Yes the banks would lose interest payments however it would help contribute significantly to the equity of homes. That way people are paying down their own mortgage and not the government.
People are less likely to walk away from mortgages with significant equity.

George, it makes me happy to hear a Realtor say those words. It's a shame that there aren't more Realtors out there like you.

@ jaded, who posted on another link I have seen very few circumstances in which it is has been healthy to not have some type of regulation (government oversight).

Jaded- there is a difference between oversight and manipulation. Why not let 100% of mortgage payments go directly toward the principle for 6 months?

Everytime anyone comes up with one of these "why dont we get x for free so that y can happen" arguments, they fail to realize that there is another victim on the end of your x proposal. In your example above, what if i invest in the banks stock, i am not into investing with 0 return for 6 months, niether is anyone else. What about the bank employee that loses thier job because the bank is lending money for free?
All you are doing is passing along your "victim" status to someone else. How magnanamus of you. This is not unlike the behaivior that casued the bubble in the first place. Predation on each other to find the next greater fool.

Dear Anonymous -

Your use of the word "victim" is interesting. Currently - Americans are saving the banking industry - giving them free money - letting them borrow for nothing and "invest" for guaranteed returns, let them mark assets for fictitious values...bankers are doing just fine right now......try telling first time home buyers who is the "victim" when they go to try to buy a house in this fantasy land of home prices and related fees that come along with it (closing costs, commissions, taxes, etc) just to keep declining industries alive (banks, real estate agents, etc)...computers and the internet can do these jobs..

Anonymous: When the tsunami of “jingle mail” finally hits these “poor victimized banks” they’ll wish that they had been more creative in coming up with ways of helping people pay down mortgage debt. My suggestion was not submitted with the intent to create ways of maximizing the profits of banks. My only concern was come to come up with a way to help struggling homeowners have more equity in their homes and to reduce the rate of foreclosures. I don’t care if these evil corporations lose 6 months of profits! They created this mess by passing out bad loans right and left. Last time I checked the only way to get a loan is to go to a bank, apply and either get approved or denied. Maybe banks should have done a lot more denying of loans. Oh wait that would have interfered with their profits!

Jimmy and Jaded- not sure why I posted as anonymous, maybe too many beers last night (looking at my typos, surely was). you are both reinforcing the point I have been trying to make for years. Home values need to come down. They are going to do so no matter what the government or banks try to do to manipulate the market. Tax credits, interest free payments, HOPA, HOFA, HEMP whatever... they all do the same thing...delay the inevitable. Do you realize that the FHA is basically the only lender in the US? Because banks wont dare lend their money. What does that tell you. The loans being done right NOW are doomed to fail. ALSO, with average home prices @ $250k for Baltimore metro, first time home buyers need a whopping 20K in the bank to buy a home. How many first time buyers have that kind of cash? I had $3k when I bought mine in 1998.

Jimmy Klingenbeck is absolutely rite!

I was also wondering why are the humans needed to read the calculations needed to approve a mortgage, do the closing etc. An .99$ app can do it. And needs no bailout.

Jaded,
There is a much simpler method to free the "homeowner of their struggles": it is called foreclosure.

The albatross mortgage is lifted off of the necks of those in need. They move to a rental appropriate for their financial situation. They can now begin building precious equity.

There are no free lunches, quick fixes, or shortcuts, or magic tricks.

The homebuyer tax credit clearly was a sugar "high" and now housing is crashing again. Clearly the credit did what it was designed to do--stimulate buying--problem is, without addressing unemployment making buyers nervous and foreclosures putting downward pressure on prices, housing can not survive without the credit. If it is to return, I hope this time it is conditioned on buyers receiving housing counseling. This will weed out some who are not likely to be sustainable homeowners right now.

I agree that they should just come out and say it won't happen...People are like lemmings (I was one!)...Once the rumours start, it is hard to distinguish lies from the truth! They need to say that it will not happen.

I have coworkers who are looking now, and just yesterday, one of them said "You know I heard they are going to open that credit up again"...He is already approved and looking, but pulled out of a deal so that he could get this elusive credit. This is nuts. I didn't even bother commenting to him about what he did, because either way I think he is going to get a deal if he waits, and would be stupid to buy now when it is going to get worse (credit or not).

I don't know how people in that (realestate) industry can survive. It's bad, but this isn't as bad as it is gonna get. The market needs to bottom so that people can start rebuilding and markets can stabilize.