A Taxpayer Bail Out I Would Vote For

I was listening to a real estate professional talk about the next wave of residential home defaults by owners of multi million dollar homes. These defaults are being called "strategy defaults".

As an example a house purchased for $8 million declines in value to $2 million. The owner is underwater by $6 million on his mortgage. Rather than remain in the home and continue paying, these folks are going house hunting. They look for a better house that has undergone a similar deflation in price. If said person buys a $4 million house once considered worth $16 million, they get to have their cake and eat it too.

Currently the IRS is not taxing the "bank take back" as income to the defaultor. They are being lumped into the economic morass of the laid off who have lost their homes. I say there is a huge difference is status here.

The advantages of this scheme is not limited to the wealthy, many an average joe home owner has pulled this scam. You who have been living the right way are paying for this element of the Fannie and Freddie bail out.

If I were king, I would order a review of every last default, to see who among those were ever unemployed,or how long. I would look at savings accounts and investments. At a minimum I would garnish wages for the default difference.

Being homeless for lack of employment is one thing, to dump a house on the rest of us because you feel like it, is another.

Steve