Buyouts should be fair to banks, homeowners

The March 16 “Locked in limbo” article about flooded homeowners in foreclosure awaiting buyouts is extremely biased against the banks and does not represent their side of the issue. Why should the banks take a huge loss while the homeowners walk away with a pocket full of cash from the taxpayer-funded government?

For example, consider an owner of a $100,000 home with a $90,000 mortgage. If the government buys out the flooded home for 107 percent of the pre-flood assessed value, the bank should get $90,000, and the homeowner should get $17,000. That's still an extra $7,000 above the equity for the homeowner.

From The Gazette article, it sounds like the homeowners want to pocket the entire buyout amount. For the given example, that means the homeowner would pocket the entire $107,000 while the bank will take a $90,000 loss. So the homeowner with $10,000 in home equity walks away with a $97,000 profit.

The above example is an extreme case, but it still doesn't seem to be a fair distribution of the buyout funds.

Bruce Tweeton

Center Point