Hang in there!

If a bank re-values a mortgage because it is upside down (the value of the house is less than the principal), should the bank re-value the mortgage when the principal is less than the value of the house? If a person bought a house, it is only worth less if an owner must sell for less.
If a person pays the mortgage on time, and the equity starts to build because of improvements, or better home values in an improved market, then the owner will be happy.
There is something wrong headed about re-valuing mortgages.
I bought a house twenty years ago at top dollar, $73,000. Because of the city it was in, and the possible progression of urban decay, it was later valued by the bank at about $50,000. I was trying to get out of an adjustable rate mortgage into a fixed rate at the time. I had to, and was able to come up with several thousand additional dollars to make it worthwhile for the bank to do this change. At no time was the bank ready to forgive any of the principal.
Some constraints required me to hang on to that property through a severe downturn in the home market. Eighteen years later, the market had turned around-property in that section of the city had become desirable; a few improvements had been made; and the house sold for $95,000. I had excellent use of the property through those years, had a tax and interest deduction on my income tax throughout, made some people happy, and in the end made a small profit.
So, the moral is, hang in, hang on, and relax. Tough times usually yield to better times.

Bail out the consumer

The Federal government is taking its time producing an impact on the world economy, so I offer some "what ifs" for those in charge.

If it is important to help homeowners stay in their home, why not require banks to sit down with people who are in danger of being foreclosed upon, and renegotiate the loan so that it is affordable to them, by lowering the interest rate and extending the term. If the house is still unaffordable, then reality may require either steps to make it affordable, maybe an additional low interest loan from the feds would be in order; and maybe it will continue to be unaffordable, at which time the bank might become the property owner, and and contract with the owner to become the renter in a rent to buy arrangement.

The other banking crimes that should be addressed are interest rates and penalties on credit cards. There are some who buy things on credit that they cannot and need not afford. Maybe a penalty is in order, but not necessarily an interest rate hike. The whole point of credit cards is to keep people buying, not to drive them into the poor house which is counterproductive.

Credit card interest should be capped at between 12 and 15 percent (my arbitrary numbers, so I don't sound like I am too anti-bank). The interest should be able to be calculated easily over a period of time, and statements from the credit card companies should reflect not just the minimum payment due, but the advantage of paying off completely or in larger installments. Same as cash options should become a rule rather than an exception.

So these are my two "what ifs" for the feds to consider. Neither would cost much to them. People would be happy and the economy would have the cash needed to carry on.

• Keep people in their homes by renegotiating mortgages.

• Cut interest rates and penalties on credit cards.

The country would be a better place.