Let me first state that in order to solve this crisis we must not only think outside the box ( an overused cliche that makes no sense) but outside Washington D.C..
With all of the lobbyist and special interest groups who fight against any type of change that would not fill up their wallets, this will be an extremely arduous task.
But it can be done, should be done, and will be done ...The American people have already bailed out Wall Street. We now have to bail out the people on "Main street". The people that built this country and made this country great.
If we do nothing then the situation will only get worse. This country needs a plan and a plan that will work right now. Not later. We need to take action immediately. Our future and our children’s
future depends on it.
My plan will not only help with the foreclosure epidemic that is ruining this great country, but may also help put people back to work, which in turn will help pay down the extreme government deficit that our children and their children will have to pay for generations to come. Its unfair to
burden our future generations with all of the debt this country has acquired due to mismanagement in the mortgage and financial industries.
In order to stabilize the foreclosure epidemic three main things must be done.
1). We must fix the sub-prime mortgage mess that deregulation caused.
2). We must stabilize the "underwater" loans.
3). We must modify loans for people who have suffered a job loss or have had a
catastrophic injury or illness and are no longer able to afford their mortgage payments.
Sub-prime Mortgages - Though many people do not believe we should help out people who bought homes that they could not afford. I believe we must try and do everything possible to keep these people in their homes. It will not only slow down foreclosures , but stabilize neighborhoods, and lower crime rate. Those neighborhoods that have an abundance of foreclosures have a substantially higher crime rate than those neighborhoods that are stabilized.
In order to fix the sub-prime mess , I would recommend a mortgage rate freeze back to the original starter rate for a period of five years on all adjustable rate mortgages. After five years the balance of the mortgage will revert to the average 30 year mortgage rate at that time. As long as their mortgage payment won't increase , homeowners should be able to stay in their homes. This program will be for the homeowners who have made their mortgage payments on time, but can not in the future when their adjustable rate mortgage will rise at an astronomical rate.
This program will help stabilize the home ownership market and keep homeowners in their homes, where they belong.
"Underwater" Loans- To fix most of the "underwater" (your home is worth less than you owe on it) loans, I would offer a government backed...