This Plan will-

-Allow more Americans to stay in their current homes.
-Stop the amount of foreclosures.
-Banks and Financial Institutions become stable.  Wall Street will once again want to buy these mortgage backed securities now that know exactly what they are buying. 
-Mortgages become safe as long as Americans have jobs.
-Housing demand will increase as home inventory decreases.

Here is the Plan

-Make payments affordable.  Keep the current mortgage interest rate fixed at the original rate for the rest of the homeowners life, or until they sell or refinance the home.
Let all homeowners pay interest only. If they choose to pay principal they may.   Have the new interest rate at 4%.  This is twice the interest rate that many lenders are using in their loan modifications.

If Americans know that they can live in their home forever, without the worry of foreclosure due to rising rates and payments or dropping values they will stay.

-The Banks and Financial Institutions get paid.  How can the Banks and financial institutions receive payment of principal in full when the borrower is only paying interest and at an interest that was less than originally agreed upon? I propose that each homeowner purchase a life insurance policy with the holder of the mortgage backed security as the beneficiary.  This premium is paid with the payment by the homeowner. This will guarantee eventually the principal will be paid. 

-Bring in the private sector

Bringing in the Life Insurance companies accomplishes Two Things:

1. The banks know that the outstanding loan balance is essentially guaranteed even if the homeowner should die.

2. It keeps this 'security' issue in the hands of the Private Sector vs. using Public Taxpayer dollars.

The Life Insurance companies have incredible amounts of money.  The banks will surely be satisfied to hold a life policy as security.

Additionally, the Life companies 'could' view the individual policyholders as part of a single LARGE organization.  Similar to when many, but not all, employees of a company take the Voluntary Life program options.

By thinking of this plan as a 'Group Plan' the carrier(s) can give terrific schedule credits and come up with a minimum Guaranteed Issue (GI)level.  My thoughts are that if they were to make this GI level about $250,000 that many/most of the mortgages around the country could fall into that category.

-Keep America in their homes.  Why? We must stop families from walking away from their homes.  Keeping Americans in their homes will reduce the number of homes available for sale. This reduction in inventory will stabilize home prices. This plan will help homeowners stay in their homes.  How, simple- supply and demand.  The more homes available due to foreclosure and short sales the prices must go down, the less homes available prices can stabilize.  My plan will keep Americans in their homes