A riddle or trying to find logic in foreclosures and bankruptcy cramdown

The foreclosure remedy does not allow principal reductions..lower interest only...if you qualify..
the original loan usually had a bank appointed appraiser who determined value and then charged borrower for appraisal..
it is impossible to sell a home at pre crisis values since competing foreclosures knock values down..yet those in financial trouble have to agree to original appraisal values created by bank which are inaccurate..
the banks spend tarp money to make sure there are no cramdowns in bankruptcy and no one can compete in aa market flooded with foreclosures

what a joke..defies logic

"yet those in financial trouble have to agree to original appraisal values created by bank which are inaccurate."

lenders refuse to renegotiate principal based on current market values..so if you took a loan for 300k, put down 20%..you have a loan for 240k...in many locations, the current market value of that home has been reduced to 40 or even 50% of original value...so the home is now worth 150 or 180k...which is what one would need to sell it for in order to compete with foreclosures...since the homeowner now owes more than the house is worth, or the original appraisal, it then has a high probability of becoming a short sale or a foreclosure..one area in my county has 100% of the houses currently in escrow in foreclosure or short sale...
most banks appointed their own appraisers and charged the borrower..in order to justify the value for the original loan...now not so much...since they are unwilling to consider that their foreclosures continue to drive the market down...and will continue to do so unless the tidal wave stops...its a no win situation for us..especially since they have lobbied against the bankruptcy cramdown bill

does that answer your question?

be able to refinance it based on the lower value? A refinance is to reduce the interest rate. The amount of the loan is the current balance of the old loan. A refi has very little to do with the current value of the home.

If it worked the way you seem to want, then people would have to increase the amount they 'owed' if the house they owned doubled in value between the original loan and the refi.

the current provisions in the bankruptcy bill (which will probably not pass)..are that homeowners who are deliquent can have their mortgage reduced to reflect current market values in bankruptcy ....the homeowner gets to stay in the home, the bank does not add that home to the 14 million vacant foreclosed homes currently available or soon to be available..

while we were going about paying our bills and believing in the american dream, the credit crisis broadsided many of us...the credit crisis now acknowledged to have been created by greedy wall street banks whose various departments were left unregulated and allowed billions of dollars to be made by betting against the loans while their cronies and separate departments were making more billions by financing the loans they were betting against..(sorry for the convoluted sentence but it is purposeful in reflecting the ridiculous way this was done)..in the beginning of this crisis, the only thing anyone would say was that it was complicated..well, it is...but it is possible to understand that the middle class is being brought to its knees...how many more millions of us will have to lose our homes while wall street haggles over multi million dollar yearly bonuses...

yet they are the ones who created this mess, refuse to accept any accountability or compromise on behalf of millions of homeowners..

historically, at least since the beginning of the last century..home values have steadily risen..perhaps that is part of the problem..considering a home or real estate to be an investment...but that was a given...certainly, not the same escalation as perpetrated by the banks and real estate investment people in the last decade, but still a steady increase...we counted on it..perhaps that also was incorrect but we had at least 50 or more years to get used to the idea..and maybe some naive belief that it really wouldnt get this bad

the only thing im saying is that millions of americans should not have to lose their homes because the banks are being unyielding and would prefer to take the house back in foreclosure..which now displaces a family..destroys a life..and continues to drive house prices down further since there is another foreclosure to add to the list of those for sale..mostly precipated by the greed of the lenders and banks in the first place...