09-24-2008, 08:33 PM
1. Home Mortgages: People going into foreclosure because they can no longer afford their loans got there by a COMBINATION of over-reaching when buying a home and over lending by the banks. These groups of people got into this mess by not being reasonable, prudent nor practical with their money. They probably need some kind of assistance, but they are not first on the list.
Perhaps a Government mandated to reduce loan payments to 33% of Gross Income based upon the homeowner's 2007 IRS statement of Gross Income. For this reduced rate, say for 5 years, the homeowner agrees to stay in his home and to repay the Government, when he sells the home, the sum difference between actual loan Payments and adjusted loan Payments from any equity he may have in the property.
This plan should be available only to home owners who actually LIVE in their homes. Investors, Speculators and Flippers do not qualify as they are in a business venture.
2. Foreclosed Homes: The Government buys these bad loans at $.20 on the dollar - thus taking the "bad debit" off the bank's books and giving them some liquidity. The Government will then sell these homes for what they paid for them to FIRST TIME BUYERS who qualify by having a proven income of $40,000/year and can make a 5% Cash Down Payment. The Government will then LOAN these first time buyers the balance due on the selling price on a 15 year Fixed Mortgage at 6%.
Home Buyers agree to stay in the home for a minimum of 5 years, and if and when they sell the property, they Agree to return to the Government 20% of the Net Profits from the home sale.
Thus home will not stand empty. Communities will be made whole. Local taxes will be paid. And we, the Taxpayers who finance this deal, have a shot of at least getting some of our "investment" back.
It's very clear now that the American Taxpayers are in no way interested in bailing out the Kingpins of Business and their minions. Did they know they were at risk when they massaged the "system" to their advantage? Of course they did.
Let me get this down to a level most of us can understand. If you build a house or add to it, there are Building Codes that must be adhered to. Walls MUST have a 2x4s on 16 inch centers. The builder can save 25% by putting them on 24" centers, BUT, when the local Building Inspector shows up to sign off on the work, if he sees that code has been violated, he has every right to, and in most cases actually will, stop construction, and tell the builder to do it right, or tear it down.
That's how REGULATION is supposed to work, and I have yet to hear anything from Washington DC or Wall Street about what happened to their building inspectors.
Perhaps a Government mandated to reduce loan payments to 33% of Gross Income based upon the homeowner's 2007 IRS statement of Gross Income. For this reduced rate, say for 5 years, the homeowner agrees to stay in his home and to repay the Government, when he sells the home, the sum difference between actual loan Payments and adjusted loan Payments from any equity he may have in the property.
This plan should be available only to home owners who actually LIVE in their homes. Investors, Speculators and Flippers do not qualify as they are in a business venture.
2. Foreclosed Homes: The Government buys these bad loans at $.20 on the dollar - thus taking the "bad debit" off the bank's books and giving them some liquidity. The Government will then sell these homes for what they paid for them to FIRST TIME BUYERS who qualify by having a proven income of $40,000/year and can make a 5% Cash Down Payment. The Government will then LOAN these first time buyers the balance due on the selling price on a 15 year Fixed Mortgage at 6%.
Home Buyers agree to stay in the home for a minimum of 5 years, and if and when they sell the property, they Agree to return to the Government 20% of the Net Profits from the home sale.
Thus home will not stand empty. Communities will be made whole. Local taxes will be paid. And we, the Taxpayers who finance this deal, have a shot of at least getting some of our "investment" back.
It's very clear now that the American Taxpayers are in no way interested in bailing out the Kingpins of Business and their minions. Did they know they were at risk when they massaged the "system" to their advantage? Of course they did.
Let me get this down to a level most of us can understand. If you build a house or add to it, there are Building Codes that must be adhered to. Walls MUST have a 2x4s on 16 inch centers. The builder can save 25% by putting them on 24" centers, BUT, when the local Building Inspector shows up to sign off on the work, if he sees that code has been violated, he has every right to, and in most cases actually will, stop construction, and tell the builder to do it right, or tear it down.
That's how REGULATION is supposed to work, and I have yet to hear anything from Washington DC or Wall Street about what happened to their building inspectors.