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Bernanke & Paulson Need to Create a Mortgage Specialist Fund

I just emailed Bernake this morning requesting they consider a cap on Mortgage rates as part of the bailout plan for any institution that participates. This action would serve several purposes.

As a baseline, controlling the spreads for credit worthy individuals would in a sense, limit those that have been responsible in their endeavors participation in the bailout of reckless/inept/unscrup... individuals, by affording them cash flows at a reasonable rate and not allow the institutions a means of inflating the spreads to profit inordinately on the backs those of us who have been responsible in our financial dealings.

We certainly have a historical spread that can be referenced to set the cap. This should also serve to make rates more competitive in favor of the consumer as those institutions that don't participate in the bailout will not be getting any new business unless they are competitive in the market.

In the face of a comprehensive bailout plan, realizing that I, like everyone else is on the hook, would appreciate knowing that the spreads are required to be reasonable and these institutions are committed to normalized spreads.

Without suggesting collusion on the part of these institutions, I can easily see where they will push the limits on the spreads as this draws out. Eventually responsible consumers and businesses will need to address cash flows. Without these measures, I can easily see institutions holding out longer than the masses to the point that what is currently an excessive spread over the 10 year Treasury note becomes the norm.