I’m not aware of having seen it brought up anywhere else: should 401ks and other retirement account tax laws be modified so that distressed homeowners can use the money to refinance or pay down mortgage debt on a primary residence without a penalty?
Wouldn’t it make more sense to allow someone to bail themselves out with money that is already theirs rather than to be forced in to bankruptcy or defeating years of intelligent saving in a single blow by penalties?
Of course, not everyone has a retirement to fall back on. When the both the real estate and stock markets were on the rise, there was a frequent mantra to retirement accounts, “Contribute ’til it hurts and then give some more.” Now there is money “locked” in these accounts.
Is it worth discussion?