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HOUSING: American dream can be a reality again

Letter by Ron M. MacLeod, Federal Way on Dec. 2, 2011 at 4:24 pm with 4 Comments »
December 2, 2011 4:24 pm

Problem: Foreclosures can force homeowners delinquent on their mortgage payments to become homeless; foreclosures reduce the tax base as well as funding for education, child care, police and fire services, elder care, etc.

Solution: Let lenders keep equity with no debt via a note at full value, with interest-only payments, pay taxes if homeowner can’t and add amount of taxes to the note.

Benefits: The real estate market doesn’t become flooded with foreclosed properties; lenders do not sell at a loss; the tax base is not reduced; jobs increase as new home construction increases; no vital governmental programs have to be reduced or cut; consumer buying power increases; bankruptcies would be reduced across the nation for homeowners and lenders; there would be no federal need to bail out lenders and homeowners, and the wealth equity ratio between ages 60 and ages 30 would be reduced from an all-time high of 49 times; the economy would be infused by not spending trillions overseas.

By implementation of the above solutions, the American dream can be a win-win-win situation and will be a reality again.

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  1. Vox_clamantis_in_deserto says:

    Home run, Ron, thanks.

    Given the current… reluctance of banks to add distressed properties to their inventories, I have often wondered why they do not offer interest-only options to struggling mortgager’s. And the rest of your note equation make sense to all concerned parties. Good stuff!

  2. larsman says:

    Given that the interest rate amount is usually exponential compared to the principle amount, and that there is no stated duration of the new conditions of the temporary “loan”, exactly who would ultimately benefit as time went by?
    I believe that this methodology, though at present could begin as benign, would ultimately resemble the Egyptian model that successfully enslaved the Hebrews in ancient Goshen.
    Remember, not everyone might be looking for a “fair solution”.
    Sometimes a crisis is invented and managed for an unannounced reason…

  3. In keeping with the season – What this plan would do is turn America in to one vast Potterville.

  4. Vox_clamantis_in_deserto says:

    Potterville?

    You mean this place:

    http://www.gizzardfest.com/

    x, if you meant to say Hooverville, your post would be only slightly less off the mark.

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