I really hope that the endgame discussed here does not happen. This is moral hazard. This is a bail out of people in the 'sand' states who got caught in the frenzy of the housing bubble. This is the government deciding who wins and who loses. This will be another example of adults not being held accountable to deal with the consequences of their actions.
Where is the help for the elderly who saw their property taxes skyrocket during the bubble that passed them by?
What about the 1/3 of homeowners who own their homes outright?
What about the 1/3 of the nation that rents?
What about people who pay their mortgage on time?
How is this going to be enacted? Will they just say all mortgages in bubble areas get a 25% principal reduction? Will they go and individually examine each case?
Finally, what do we do when we allow some rich f*ck in California who didn't pay his mortgage even though he could for two years to have 25% of his mortgage wiped away, and then the bastard hangs around 5 years and sees his house appreciate and then he sells the home and pockets $250k?
Just remind me about 'fair' if this happens.