Mortgage Crisis Solution?

Mortgage and Lending DRE 01329451 NMLS 963508

I find myself thinking of what other way there can be to help solve this mortgage nightmare.  I have read many articles on line and the one I thought might help out in this time of crises was on a study done on a Real Estate problem Mexico had.

Part of the solution they came up with was that instead of asking the banks to take a lump sum loss they subsidized the homeowners mortgage payment. So if they qualified for a $2,500 payment but the mortgage payment was $4,000 they would pay $1,500 for the homeowner monthly.  This subsidy would be paid until the market returns or put a time limit.  The money can come from the rest of that portfolios good mortgage interest that is being paid to the investor. In addition, there can be agreements to share the future equity.  If the interest rates are locked as well, the losses can be reduced.

There was more too it but the point is, would it not be less expensive for tax payers?  The profits were made by the corporations and now the expense (bailouts) will be paid by the tax payers.  Why not take from these portfolios that have the bad loans?  Others that are paying their mortgages, the interest is being paid to these investors right?  So let those of us who invested pay for what has to be done to fix the problem.

The new bill going through the House sounds OK but it still lies the bailout on the tax payer.  We are looking at higher interest rates, higher gas prices, higher food prices, higher inflation, slow job market, lower wages etc...  Now throw on top we will have to pay for the bail out too!  There are other solutions but I guess our elected officials have to bailout their friends first.


Any thoughts?

Comments (1)

Jimmy McCall - Cunningham, TN
The Ex-Mortgage Consultant

Giovanni,  Very interesting thought.  The government has been subsidizing farmers for year.  Anyway, welcome to Active Rain and congratulations on your first blog post.  Good luck and happy blogging.

Jul 23, 2008 12:21 PM