Dave W

Citi's Flip-Flop on Mortgage Cramdowns: A Really Bad Idea

Forget the Cram Down. Foprget who did what to create the problem. Concentrate on the solution.

Modify all loans issued since January 01, 2000, into 20 year, Zero interest loans. The resulting principal only payments will: 1. lower the house payment and rapidly reduce the mortgage balance for the underwater homeowner. 2. provide capital to the lender to lend at today's rates and underwriting guidelines. 3. stabilize the housing market and stop foreclosures and short sales. 4. put all homeowners and investors in a positive equity position within 5 to 7 years, not 15 to 20. 5. increase tax revenue to State and Federal governments without increasing taxes. 6. provide a monthly economic stimulus to the household from the reduced house payment, without government intervention, bailout or increase in taxes. Much better than a one time check.

Not my idea but the proposition of The American People's Fix, check them out at americanpeoplesfix.com. An alliance of homeowners and investors with a viable solution to the housing market meltdown.

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!!!

Barron's: Laing's Mortgage Relief Plan Could Actually Work

Why has no consideration been given to the artificially high home values created by the policies of Government agencies, Wall Street firms and Lenders during the real estate bubble?
These policies permitted buyers to purchase more expensive homes than their incomes could support, creating an artificial oversupply of buyers, an undersupply of homes and the over valuation of real estate. These artificial influences on the housing market are being ignored.
All homeowners were harmed by these created home values. Every inflated home sale became a comparable used in many future appraisals.
Is this Fraud for Profit? Government agencies, Wall Street firms, Lenders and the Appraisers knew that home prices were being affected by an undue stimulus i.e.: special or creative financing (Prohibited as defined by FNMA and FHLMC). And no one informed the home buyers.
We need The American People’s Fix. Visit AmericanPeoplesFix.com