My repeated cure for Strategic Mortgage Defaults or Walkaways

Last evening, in the posting immediately beneath this, I returned to the problems of negative equity in the US and UK housing market. I later recalled that I had proffered a solution to avoid this obvious potential problem and reviewing these blog archives I found that such a cure was offered on 22nd September 2008, exactly one year ago from the dire posting of last evening. That post may be read from here in full, it was titled 'Curing Britain's Property Price Crisis', it concluded with the following idea: Mortgages have always assumed the equity provided by the mortgagee is the first at risk. In this crisis that has to be changed. I suggest that for houses purchased since Gordon Brown, in the words of incoming BoE Governor King, to paraphrase 'moved the Goal Posts and excluded house prices from the CPI' any loss of value on the resale of such houses be directly proportioned between the first mortgage holder and the mortgagee. This is potentially expensive, but less so if it halts further slides in house prices. As the country is effectively bankrupt such a move will need financing and as a further step to somewhat also put the cost of the greed at the door where it lies I would further suggest the exemption of the first home from capital gains tax be withdrawn. On the first anniversary of putting forward this so obvious proposal, that was picked by the BBC News web site for recommended reading, I must once again ask on this blog, "Why are we led by such incompetents?"