Here is a simple, straightforward plan to stimulate the economy. I received this in a cc: from my favorite lender. It was a message to Carmen Wong Ulrich at CNBC. I've been waiting but it hasn't made to air, I thought I'd post it here!
I am a 16 year mortgage veteran with a real idea on a low cost stimulus plan.The biggest problem with refinancing people that are paying their mortgage on time is appraisals.
Many worthy people bought their home at the peak of the market and now can't refinance because they are upside down on value. They don't have enough equity to take advantage of the current low rates. They are missing out on lowering their payments by $100 to $400 dollars per month because their home won't appraise at value, with enough equity. They have paid on time and will continue BUT they don't have enough equity.
Let's let them refi without appraisals. This would pump BILLIONS of dollars back into the market monthly.The new investors that would be buying these loans would be guaranteed the top 25% to 40% of each mortgage. Just like V.A. and F.H.A. loans now. The only cost to the government would be the foreclosures which would be minimal because these are the GOOD borrowers who have been paying their mortgages on time and will continue to.
This is a LOW COST bail out that would stimulate the economy with much less cost than many proposed plans.
Makes sense to me!
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