This is scary shit people, the last time they agreed was on the War in Iraq. The last time before that was NAFTA. Now they agree on......
How to fix the housing crysis. Yes, we are truely fucked. Their solution is not to give the money of the people hurt by this to the financial Institutes that have made BILLIONS off it.
This is my general overview of how I see it.
The Problem: Housing prices sky rocketed because people made good money on the Internet bubble and got into houses they couldn't afford when the bubble popped. The Mortgage companies were stuck with houses they needed to get money out of, interest rates fell so people could afford them at higher prices that were asked so Mortgage companies and buyers wouldn't loose money. Thus the house of cards was started and people started to perpetuated the problem with insane housing investments for income as mortgage rates continued to drop. After mortgage rates couldn't go any lower the banks continued the peditory lending game with interest only loans and short term rates. The banks made money off foreclosures and most people could dump their house for as much or more than they bought it for so they didn't worry, it was an investment.
Well, now home owners and Mortgage companies are left holding the bag because housing prices are dropping and so is job security and wages ( Welcome back to 1982 ).
Dems/Repubs Solution: Give bail outs to banks to stabilize the economy. No Penalties to the boards or CEOs of the banks, just the normal guys without the inside connections or means to cash out their stock in time. So, Mr. and Mrs. X will be foreclosed on by the banks who will get the house, sell it, and then put a lean of debtiness on the homeless Mr. X until said debt is repaid while the Bank also gets money for the difference of the loan and house sale by the Government (see Tax payer, aka Mr. X). What will Mr. Tax Payer get, free credit counseling and Mortgage counseling. This is truely a Top Down approach, give the CEO a raise and lay off the workers while hiring the temps to replace them.
My Solution: Bottom up approach. Mr. X gets to keep his house that is going into foreclosure. The Fed. appraises the house and takes control of sale of the house in that when it is sold for what ever reason Mr. X or the Bank can not get profit from it, any profit goes to the Fed and they have to approve of sale. Fed. takes appraisial price and subtracts from Mortgage on home.
Bank gets payout of Half that amount which is to paid back to Fed. through a 50% taxs on all shown profit by company until it is paid in full.
Home owner gets a new Mortgage at appraised value and must pay back the other half of money owed over appraised value through a 3% increase in regular Federal income tax until the amount is paid in full.
Once the Home Owner has repaid that 50% of difference between appraised value and original Mortgage through taxes or other payments, the Fed then releases the " lean " on sales of the house so the home owner can sell house for more than appraised value an keep the profits, but can not do so until 5 years has passed between the pay off date and the sale.
Of course my approach would need tweaked and modified so it couldn't be abused, but it is the general Idea. This will never happen though because the powers that be can not profit from this system and there would actually be a degree of accountability by those involved.
How to fix the housing crysis. Yes, we are truely fucked. Their solution is not to give the money of the people hurt by this to the financial Institutes that have made BILLIONS off it.
This is my general overview of how I see it.
The Problem: Housing prices sky rocketed because people made good money on the Internet bubble and got into houses they couldn't afford when the bubble popped. The Mortgage companies were stuck with houses they needed to get money out of, interest rates fell so people could afford them at higher prices that were asked so Mortgage companies and buyers wouldn't loose money. Thus the house of cards was started and people started to perpetuated the problem with insane housing investments for income as mortgage rates continued to drop. After mortgage rates couldn't go any lower the banks continued the peditory lending game with interest only loans and short term rates. The banks made money off foreclosures and most people could dump their house for as much or more than they bought it for so they didn't worry, it was an investment.
Well, now home owners and Mortgage companies are left holding the bag because housing prices are dropping and so is job security and wages ( Welcome back to 1982 ).
Dems/Repubs Solution: Give bail outs to banks to stabilize the economy. No Penalties to the boards or CEOs of the banks, just the normal guys without the inside connections or means to cash out their stock in time. So, Mr. and Mrs. X will be foreclosed on by the banks who will get the house, sell it, and then put a lean of debtiness on the homeless Mr. X until said debt is repaid while the Bank also gets money for the difference of the loan and house sale by the Government (see Tax payer, aka Mr. X). What will Mr. Tax Payer get, free credit counseling and Mortgage counseling. This is truely a Top Down approach, give the CEO a raise and lay off the workers while hiring the temps to replace them.
My Solution: Bottom up approach. Mr. X gets to keep his house that is going into foreclosure. The Fed. appraises the house and takes control of sale of the house in that when it is sold for what ever reason Mr. X or the Bank can not get profit from it, any profit goes to the Fed and they have to approve of sale. Fed. takes appraisial price and subtracts from Mortgage on home.
Bank gets payout of Half that amount which is to paid back to Fed. through a 50% taxs on all shown profit by company until it is paid in full.
Home owner gets a new Mortgage at appraised value and must pay back the other half of money owed over appraised value through a 3% increase in regular Federal income tax until the amount is paid in full.
Once the Home Owner has repaid that 50% of difference between appraised value and original Mortgage through taxes or other payments, the Fed then releases the " lean " on sales of the house so the home owner can sell house for more than appraised value an keep the profits, but can not do so until 5 years has passed between the pay off date and the sale.
Of course my approach would need tweaked and modified so it couldn't be abused, but it is the general Idea. This will never happen though because the powers that be can not profit from this system and there would actually be a degree of accountability by those involved.
Last edited by Lotta_Drool (2008-04-04 14:24:29)
