I saw a news piece today about a lady who has lost her entire $100,000 downpayment due to the decline in home prices.  She has continuted to make her payments, and has talked to the bank about getting some help with her loan.  Her income has dropped and it has become more difficult to make payments.  Do you think the bank was willing to help?

For the good person who is paying the bills, the banks are not interested in helping.  They are in business to make money and they don’t like cutting deals unless they see an upside.  For a person who is not paying, they may be willing to cut a deal.  Something is better than nothing to the bank.

What is so frustrating about this situation, to the lady in question, to me personally, and to many others who are in the same situation, is that as long as you do the right thing and pay your bills you get no help.  If you stop paying, then maybe you get a break.

I see the mortgage bailout plans as a necessary evil right now.  Foreclosures are inevitable, but maybe the rate of foreclosure can be slowed by helping a few people.  But hopefully the help will go to good people who got in over their heads and not to investors who happended to get stuck holding a property.

Real estate investment involves risk and there should not be a bailout for taking risk.  That eliminates the consequence and encourages irresponsible behavior.