Urbane Gorilla!

3 Key Steps to Fix This Fiasco

In a way, the heckler at the back of the room has a point... What should have been done is just a case of 'flogging a dead horse. ' What we need is to move forward in the most sensible fashion.

Maybe the holdouts are correct. Perhaps we should slow down and think things through. I really am concerned when Bush's cronies start flapping wildly and scream that we have to make an instant decision. Look where it got us in Iraq.

I haven't heard of any other reasonable approaches to the problem, but it might be best to see what other ideas float to the top of this cesspool before blindly signing our children's future away.

For example..(and this is just one piece of excrement that has floated up from the depths of my mind....) :

In 2007 there were 1,285,873 properties that had foreclosures begun against them according to Realtytrack. (The number of foreclosure actions was actually higher, but I'm presuming that there were 2nd and 3rd mortgages involved. )

The average home value has been variously reported at around $230,000. I'm presuming (.. a big guess here ) a loan value of $200,000 per foreclosed home.

$700 Billion divided by $200,000 = 3,500,000 possible purchases.

If Paulson is correct and the cause of our downturn is home foreclosures ( and I feel this is just more Bushie spin... The cause of the financial problem is uncontrolled lending practices.. ) then maybe we should tackle the root problem. Buy the homes directly.

We could also implement other refinements. Perhaps, we make deals with the lenders and the property owners. The owners lose their equity and the lenders have to accept 'market value'. In other words. The careless buyers suffer and the banks suffer too. Nothing like spreading the pain around.

So why would the banks go for it? Three reasons (1) It closes out their problem with real cash right now, and (2) it eliminates the problems involved in fixup, management, legal fees and delay associated costs, and (3) it relieves them of the anxiety of watching their repo drop in price even as they are trying to sell.

So, what do we do with Federally owned properties. Well, we already have agencies that are designed to handle issues such as these. In California, we have the Cal-Vet repoed homes for example. Or perhaps we could begin placing them in the hands of larger rental agencies for the normal 7% fee. Maybe, a Federally processed 'lease to own', where the homes go to people that can actually afford to buy if given an opportunity. How about bundling them and selling them to overseas investors. Think of the job growth that this will generate.

If my numbers are close, I can see the $700 Billion going towards last years foreclosures as well as this years. And those nasty old banks aren't just given uncontrolled volumes of money. Just look back at the war in Iraq. It's worse than owning a boat... We just keep throwing money in that pit... I see this bailout as being the first pitch in many innings.

jegan ;-)