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Here’s a letter to the New York Times:
What does Rep. John Conyers (D-MI) have against homeowners?
By proposing “a federal law allowing homeowners to reduce their mortgage debt to no more than the current value of their property” (Letters [2], Sept. 5), Mr. Conyers would effectively force homeowners to purchase property-value insurance from mortgage companies. That is, by obliging mortgage lenders to compensate borrowers for certain declines in the value of borrowers’ properties – compensation paid in the form of reduced principals on outstanding mortgages – Mr. Conyers would prohibit homeowners from assuming the risk of such declines in their homes’ values.
Mortgage companies would willingly sell such insurance to homeowners; indeed, they’re free to do so now. But the fact that such insurance is very rare reveals that homeowners find the value of such insurance to be less than the price that mortgage lenders would charge for it.
Why does Mr. Conyers want to force homeowners to buy something that they show by their actions they don’t wish to buy?
Sincerely,
Donald J. Boudreaux