imputed income of continuing to live in defaulted property to be taxed?

[JackBondLove]

http://www.politico.com/static/PPM170_101006_amherst.html

Once the problem has been redefined, the solution is more obvious—change
economic incentives by raising the cost of strategically defaulting, and lower the cost
of staying in a home. Let’s think about how to implement this. One obvious way—
the economic defaulter can stop making mortgage payments and live rent-free in
that home for 20 months, on average (longer in judicial states, less time in nonjudicial
states). An even more mercenary borrower can move to cheaper quarters
and rent out the (defaulted) home, pocketing the proceeds, while still failing to make
the mortgage payments. Borrowers have taken advantage of this—our 3/24/2010
Amherst Mortgage Insight article “Has A More Borrower Friendly Environment
Created A Moral Hazard Problem?” showed that the performance difference
between owner-occupied borrowers who might qualify for modification plans and
non-owner-occupied borrowers who do not qualify—has been widening. One easy
solution—change a borrower’s incentive by taxing the imputed benefit from living in
a home rent free. At the end of each year, a servicer would send the borrower and
the IRS a W-2 Form, detailing the cost of the foregone [mortgage payments + taxes
+ insurance].

[tobee43]

change economic incentives by raising the cost of strategically defaulting, and lower the cost
of staying in a home.

wow...ok raise the cost of strategically defaulting by what??? no banks work with anyone really to lower the cost of staying in ones house. that's why we left.

interesting read.....thanks Jack

[Billssuck]

Well...what happens if you just walk away and don't live rent free and don't rent out the house? Yes, I'm living rent free right now but it's also for the Mortgage companies benefit that the house is maintained and not being looted out for copper wiring, etc. I think something like this would just lead to more abandoned homes than what there is now and the value of homes would only continue to plumet. Interesting read though...