Yeah maybe that’s a bit extreme. I don’t think the debt bubble would cause a bank collapse, we’ve had people get caught underwater before and a reduced price eminent domain would be similar to TARP in 2008. But we really do need to reign it in. And that’s going to involve some people taking a bath on their loans. It’s the one inescapable problem of solving housing inflation. There’s always going to be X number of people who bought recently and will end up underwater. And the two answers are the government subsidizing their loan and the government forcing a sale where they would recover most of the loan. Legislation that isn’t just another subsidy would likely subsidize the loan on a primary residence and force a sale to the government on other properties that are underwater and unable to be refinanced.
Yeah maybe that’s a bit extreme. I don’t think the debt bubble would cause a bank collapse, we’ve had people get caught underwater before and a reduced price eminent domain would be similar to TARP in 2008. But we really do need to reign it in. And that’s going to involve some people taking a bath on their loans. It’s the one inescapable problem of solving housing inflation. There’s always going to be X number of people who bought recently and will end up underwater. And the two answers are the government subsidizing their loan and the government forcing a sale where they would recover most of the loan. Legislation that isn’t just another subsidy would likely subsidize the loan on a primary residence and force a sale to the government on other properties that are underwater and unable to be refinanced.