If there's a bailout, why not bailout wall street AND main street? A property is a property, a mortgage is a mortgage. The bank gets their money either way.
Obviously the fine points/details are debatable. My preference would be to pay down the current mortgages first, since people have been doing nothing wrong, paying all along, and got screwed by the banks making the bad loans.
Wasn't in favor of the bailouts in the first place, so you're talking to the wall here. Essentially, those that didn't buy houses over their head get fucked over in your scenario. Tax dollars used to pay down mortgages that in the future could recover their value, so essentially it was free income. Its extremely short sighted. No one's payments have ballooned to levels that were not unexpected. Look, payments are what they are. They are predictable and the payment schedule was agreed to. People should have budgeted that shit and not looked at the house as something that will only go up and won't go down. Gee, maybe the government should pay for my car too. I lost value when I drove it off the fucking lot. HALP!
I'd be down if it was this: If you're underwater on your mortgage, you get $x amount of dollars and have to give it to the bank. If you are not or don't have a mortgage, you get the same amount of a money as a check tax free to spend as you want.
I knew this one would sting you. But, it's well proven true. In fact, here's a true story. Some years ago (mid 2000's) my wife & I were thinking of buying a place to rent on the coast in Newport as we were renting at the time. Then, we would retire there. Most of the houses we were looking at were in the mid 80's to low 90's. Then, on a Saturday, there was a local real estate broker get together/meeting. On the following Monday, all houses on the market rose immediately and simultaneously into the mid 100's. I want to say no less than 125, but I don't fully remember. I asked a local real estate guy and he said the decision was made to bring prices in line with Portland and also "force" a minimum buy in like other towns via the real estate brokers demands. We also had a friend who was looking to purchase a nice mobile home on land just north of Newport and the price was around 89. A few days later it was 125. I know you don't like having your job smeared as you want to think Realtors are as pure as newly fallen Tibetan snow, but those are the plain facts. Realtors share equally in the blame for the housing fraud mess.
