FHA..........FORGIVE & FORGET PROGRAM........President Obama please.....

Tim hit something.  There is no rule that a company couldn't fill that niche...  And if one company started doing it, others would have to offer a similar program in order to compete. 

If I am understanding what Tim and Lane are saying, is that we could create a company that...what, buys up the mortgages that the banks won't reduce the principal and forgive the difference on, and then refinances those loans to the consumers at a fixed interest rate, thus alleviating the tide of pending foreclosures? Did I get that right? It does sound like something that could work, provided that someone had the capital and initiative to do it...

Richie -  Great post!  The situation we are in has plenty of blame to go around (greedy banks, uninformed/misguided borrowers, fast talking real estate agents, risky loan officers, stock brokers, over their heads investors/flippers and on and on) and while homeowners share in the burden of blame, there is something that needs to be done about the homeowners who have been displaced.  Your solution sounds perfectly plausible to me!  Take out the black eye of foreclosure on their credit reports and see what they have left for credit.  If they still qualify, why not give them a USDA or FHA loan.  And if you want to restrict it (so it doesn't look like the government is giving hand outs... which I am sure there will be some squawking about) why not offer this to homeowners who tried to avoid foreclosure (attempted loan mods & short sales).

It may too late for some who have already lost their jobs, or work hours and paycuts.  Although great idea for investors to consider since their cash money is earning only 1/2 percent at best.  Interesting post, Thanks,

Richie,

There are many answers to solving the problems of the housing situation.  Most of them easier than the path the government has chosen.  They just do not want to solve the problem.  This a doable situation but it will not get picked up.

I like what Tim said very much! Give me a free market solution over another government program any day of the week.

"They cannot work and were never designed to work"

Sorry, you lost me at this as we are in uncharted waters and at least solutions are being offered for unique situations. It's easy to poke at things in hindsite but at least you've offered another idea which could work and I appreciate that. Write your congressman!

I don't agree with the knee-jerk opinions offer by Tim and Jessica, their ideas of a so called "free market" are what opened the way for the greed, dishonesty and avarice that led to this mess in the first place. But then again there are those who are blind even to hind sight!

Russell Lewis #25. Oh, so instead of letting people freely choose to create something to solve a problem and to provide a great service to help people in need, just come back with a knee jerk solution that this is a job only the government can solve.  I and others see that much of the problem was created due to government interference in the free market to begin with.  Who was keeping interest artificially low?  Who created a government sponsored entity that allowed much more risk to be let into the system due to implied government guarantees?  When government interferes with the pricing feedback mechanism, things usually get messed up. Market participants get faulty signals from government manipulated prices and we therefore end up with a lot of misallocated resources, ie. too many homes which are way overvalued for what people can actually afford.

All I'm saying is instead of using the force of government to force the population to do something to fix the problem, why not allow free Americans to choose to come together and implement a solution of their choice. 

There is a program doing exactly what Lenn suggests.  I learned about it last year through an attorney that had a client receive a 100,000 reduction of the principle amount of their loan.

It is NACA ..(Neighborhood Assistance Corporation of America).  It is a non-profit advocacy & Hud certifiied counseling agency.  

Visit NACA.COM and check the Home Save Program...

Check it out...interesting and good to know about.

Kim  :-)

No offense, Russell, but greed and dishonesty are conditions of the soul...not of an economic system.

US v. THEM...Your post about VOTING with our paychecks and our feet moves the power to the powerless.  When will we ever learn that while THEY have the money, it is due in large part because WE continue to give it to THEM. 

I am for the forgiveness program idea.  We do need a major shift in the social consciousness...a new understanding that MORE IS NOT ALWAYS BETTER and often results in a NET LESS!

Richie Thanks again for a post that stimulated discussion and I like your well put thoughts and ideas. Though we may not agree on every single issue, I doubt that we are all that different in the grand scheme of things. Have a good weekend!

Jessica - No offense taken and I completely agree that "greed and dishonesty are conditions of the soul" . Your point is well taken. Unfortunately, unregulated laissez faire capitalism has a tendency to bring out these conditions to the detriment of others over and over through history and in our case on a national level. It' crosses all party lines and ideology so no one is right all the time. Though I am one of those somewhat naive people who still believe that human beings on the whole are good, the reality is that there are always folks around who want to take advantage of others for personal gain. There will always be some sort of struggle for balance but it seems like the only time we find it is for a brief time when the pendulum is swinging past that midway point. ;-)

Tim I am not sure why you seem to take it on yourself to repeatedly attempt to call me out and  to convince me of your ideas. Frankly it makes my head hurt to try and think down on your level. Let's just agree that we have opposing opinions on nearly everything and just leave it at that!