Re: Variable Principal Mortgages

On Mar 4, 12:52 pm, Lantern <lanter...@xxxxxxxxxxxx> wrote:
Bernanke said today that banks should reduce mortgage principals to
help with subprime mess. Why not have "variable principal" mortgages
like we have variable interest rate mortgages? Home values have gone
down temporarily so why don't the banks arrange a variable principal
loan? This way the homeowners can stay in their home as value goes
down. The banks can share in increase when home values come back up.
Why not?


sounds good, it would be fair....but given the fact of loans being
bundled and sold to private investors by the bllions world wide, and
that 'collateral' being used to buy yet other worthless paper..... the
entire mess would be at risk of implosion.


or course its about to implode now, regardless.

the final fatal flaw in your idea is that its sensible..... so of
course there is no way in hell that will fly.



Phil scott
.