It is simple enough.
Instead of handing over billions of dollars to the Wall Street "pigs at the trough" how about giving the average homeowner a break.
Instead of stabilizing the markets by giving these vaulted institutions cash without a payback schedule why not stabilize the mortgages that are giving them all a headache. Follow me on this.
Knock every current mortgage, every late mortgage, any mortgage that is used to buy a home in 2008... a 5% mortgage cap. I don't care what the cost of the house is... $20.00 or $2,000,000.
The rules are simple.
• No second homes...primary residences only.
• No fixer uppers that are uninhabitable... people must live in the homes.
• 5% fixed APR for 30 years.
• If the homeowner has been late on payments wrap them into the new home price.
• No minimum or maximum loan amounts.
• No credit checks.
• No eliminations for bad credit.
• Elimination of tax debt from short sales for primary residence homes that have already gone into foreclosure.
• The 5% mortgage cap applies to the current loan balance including second and thirds and fourths.
• Audits are made to verify the debt and not the value of the home.
Also...
• if a home has been foreclosed on and no new primary residence home owners have taken possession of the property, the original owners could take possession of the home from the bank for the default amount.
Also...
with regard to new purchases, standard credit checks and home appraisals apply.
Finally, financial markets would freaking hate this idea but it would stabilize the home market. I don't know anyone that voluntarily loses a home even if it is overvalued.
I'm tired here on the east coast. Maybe someone could help me flesh this out better. My main point of this is if we have to borrow money to fix this mess wouldn't it be better to actually get the money ourselves.
Just a thought.