Millions of people are underwater on their mortgages, and many of those borrowers have payments straining their ability to pay. The favorite solution of pandering lefties is to simply forgive the debt and lower the borrower's payments. Of course, the solution would bankrupt the banks and cause significant future problems with moral hazard because borrowers would have a strong incentive to borrow imprudently in hopes of obtaining free money. Principal forgiveness is not the answer, and despite loanowner's false hope, no significant principal forgiveness is forthcoming. Excessive mortgage debt is a drain on our economy as too much money is diverted to debt service, but the real problems with loanowners is their immobility. Loanowners are trapped by debt in their…[READ MORE]

In what can only be described as the best decision of the housing bust a from regulator, Federal Housing Finance Agency's head Edward DeMarco said there will be no principal reduction on Fannie and Freddie loans. He will be loudly criticized, particularly from left-wing panderers, but Mr. DeMarco understands that Moral hazard is the central issue in housing bust, and giving away free money to loan owners is never a good idea. Millions of loanowners will be crushed by this news. Everyone who doesn't want to see their tax dollars squandered to bail them out will rejoice. Regulator says no to Obama mortgage write-down plan By Rachelle Younglai -- WASHINGTON | Tue Jul 31, 2012 5:41pm EDT (Reuters) - The top…[READ MORE]