Dave W

Deleveraging Through Loan Modification

No doubt the housing market is broken and putting us and our children and their childrens children in debt to fix it is stupid. We need an accross the board loan modification for anyone who purchsed or refinanced from January 01, 2000 to current.

I would like to draw your attention to a grassroots group of homeowners and investors who are trying to do just that, force a mass modification. They call themselves The American People's Fix and their website is americanpeoplesfix.com.

Their solution is simple but has far reaching implications. Here is the solution: Take your existing mortgage balance and divide by 240. The answer is your new principal only payment for 20 years.

With some 12 million homes underwater this plan will accelerate the mortgage balance pay down so that the home value and mortgage balance will be equal in 5 to 7 years. It will reduce the monthly payment, which becomes it's own economic stimulus plan every month. Money that can be spent on further reducing the mortgage balance, pay bills, spend in the general economy or save. The lender gets their money back, but does not earn a profit. The Federal and State government get increased income without increasing my taxes, because I don't have a mortgage interest tax write off.

I am much more inclined to stay in my home if I know that in 5 to 7 years I can sell without writing a check or doing a short sale or refinance without writing a check as well.

Right now I am a renter in my own home, I'm 59 bought in September of 2006 and put 20% down on a $320K home in Arizona. I qualified full docs and am not late on my payments nor am I in financial distress.

I just can't sell or refinance because I'm 50% underwater. I've lost my $64K and would have to write a check for $96k if I had to sell today.

I've worked all my life and raised my family and paid my bills and earned my good credit. Now I may be forced to loose everything in my home and my credit to boot. Where is my bailout? That's why I joined The American People's Fix.

My American Dream has become my Retirement Nightmare!!!