Why not set all mortgages now to the principle currently outstanding?

[Skidmore]

With no interest. For a period of five years. Mortgages to be paid to the treasury directly. Get banks out of the mortgage business entirely for a period of time and only let them manage basic money accounts for a while until some reasonable regulations can be worked out and a restructuring of the whole finance industry occurs.

[robinlynne]

1. I like it. or 2% or something reasonable.

[elifino]

12. Prime + 3% for all loans and credit purchases would be nice

[cliffordu]

19. bingo.

[Double T]

2. All US financial institutions need to be dissolved and then start over with.........

tight regulations, oversight and mandated caps on interest and fees. wall street and the corporate banking system need to be gutted.

[11 Bravo]

16. No problem, but can we wait until Monday before we dismantle the largest and most complex economy ..

in human history?

:eyes:

[Double T]

27. 'largest and most complex' in itself is a HUGE problem.

Time to shrink and simplify each financial institution and ban complex financial instruments that only lead to criminal corruption. I guess when we are dealing with banks we should expect to work only during banker's hours; see YOU at 9:00 A.M. sharp on Monday morning.

[Coyote_Bandit]

3. Ummmm......

So what are you going to do for folks that own their homes outright? Or are they shit out of luck?

I continue to be amazed by the so called progressives that advocate alternatives that are inequitable.

[Skidmore]

4. If you own your home outright, then you don't have a mortgage.

I'm not understanding your problem.

[Coyote_Bandit]

5. Not all mortgages

are held by financial institutions. Some individuals hold mortgages where they have directly financed the sale of their home. Your alternatives would deprive these folks of income.

Your alternative will also provide financial relief to a group of folks - those who owe money on their mortgage - while not providing financial relief to other folks some of whom may actually have a greater need (the long term unemployed for example). Benefitting some but not is is inequitable.

[treestar]

11. No the point is to stablize society so there isn't a flood of homeless

And huge numbers of empty homes owned by the banks.

Critics are right when they say Americans are selfish; this is a time to look at the country, not just individuals who are scared to death someone else might get something wheny they don't.

If you own your home outright already, you are lucky. Many people in the older generation had jobs that lasted for a lifetime - the economic situation for the middle class was very good then. Many of them voted for Bush and McBush. Maybe that's enough to consider it fair?

Why would these individuals want to live in a neighborhood surrounded by empty houses and squatters.

[SammyWinstonJack]

21. !

:thumbsup:

[Coyote_Bandit]

22. Those mortgages can all default and be foreclosed

without increasing homelessness or vacant homes in neighborhoods. Mortgages are concerned with ownership interests. Homelessness and home vacancies are concerned with home occupancies. They are separate issues and ought to be addressed as such. It is not at all uncommon for people to occupy and reside in homes in which they have no ownership interest.

[rgbecker]

13. The problem is this....

Coyote saves up, buys a house for $500,000. Prices fall so the house will only fetch $300,000.
Coyote loses $200,000. You buy a place for $500,000, give $50,000 and sign a mortgage for $450,000.
Price falls. You lose your job, can't make the payments. You rent a place for a little as possible and continue to look for work. You're out $50,000. The bank is out $150,000. You want a break in rates, or interest payments. The bank wants taxpayer money to help with the loss. Coyote thinks it isn't fair.

[Coyote_Bandit]

15. Lets also add

to your scenario that Coyote is also unemployed yet has some savings which generates taxable income. Coyote has a greater loss - as well as the pleasure of subsidizing you.

[ellenfl]

8. for you . . . the value of your outright owned home will slow its

steep decline and perhaps you will regain some of your equity. everyone loses if you let your neighbors' homes get boarded up.

ellen fl

[Coyote_Bandit]

14. I actually have an incentive

to sell my home for several thousand dollars ***LESS*** than its current market value - and I am considering doing that very thing. I expect there may be a greater future incentive - but fewer willing buyers.

I can move a few miles outside of the metropolitan city/county area and pay 75% less in property taxes on four times the land and on a new comparably sized energy efficient home with access to the same government services. Since I don't work in the metropolitan area there really is no logical reason not to do this. If I have $10,000 in foregone utility and tax obligations in the next 3 or 4 years then it makes some sense to accept less than the market value in order to sell the home - especially since there is good reason to expect those tax liabilities to continue to increase. The folks who can afford to move out of this city/country metropolitan area are doing just that.

Those who own their homes outright have more concentrated investment risk in their home than those who only own a portion of the home equity. I have an incentive to sell the house because of the increasing tax laibility and because of the energy inefficiences due to its age. Because the housing market here has remained stronger than in other parts of the country I also have an incentive to sell before home prices here begin to decline as they in other areas. I also have an incentive to reduce my risk concentration.

[Runcible Spoon]

24. *snicker* It's certainly NOT progressive for you to cry about helping struggling

mortgage holders and whine "WHAT'S IN IT FOR MEEEEEEEEEE!!!!!!"

:eyes:

[Bluebear]

28. What about progressive little meeeeeeeeeeeee

:eyes:

Unbelievable. And so it goes.

[Oregone]

26. Just offer a direct government REFI. This accomplishes the same thing...

BUT, remember, mortgages are assets that pay back huge (over 100% of the loaned amount, often). If they were sold off, the asset potential would be slashed, leaving many of these banks further in the red if they were depending on a projected return. Wouldn't this leave a load of banks insolvent?

On edit: Sorry, didn't mean to reply to you. Meant to reply to OP

[BlooInBloo]

6. "Principal"....

And it's a stupid idea.

[Skidmore]

9. Thanks for the spellcheck. Would you care to

expand on your comment?

[TWiley]

7. Great ! When can I buy yours for the balance?

[Skidmore]

10. Isn't part of the problem that homes/real estate are over valued?

Maybe it is a good way to get housing prices down.

[TWiley]

17. No, actually the problem is that they are loosing value

People are walking away from their mortgage because they owe more than the house is worth.

[BlooInBloo]

20. (facepalm) Um, that's because it was over-valued. lol!

I really wonder what some people thing the term "housing bubble" even *means*. :rofl:

And just fyi: it's *still* over-valued.

[muriel_volestrangler]

18. What do you mean - "Mortgages to be paid to the treasury directly"?

What's your plan for the interest on CDs etc. that people with a bit of savings are relying on to live? Are you saying the treasury will pay that? What does "mortgages to be paid to the treasury directly" mean - if people are suddenly paying no interest on mortgages?

[Skidmore]

23. CDs and other accounts (e.g., checking and standard savings)

are not attached to real property. I was thinking about a way to isolate the real estate/mortgage end of the problem in a way that could possibly stabilize it. A reset option. Set it back to zero and start again. Otherwise, I think that there should be an expectation that people save a certain percent of their income. Now, you have a good point about the no interest end and I concur that a small interest rate should be charged on mortgages. The finance industry needs a serious revamping.

[muriel_volestrangler]

25. How do you think the interest on CDs is earned?

It's from loans of the money, such as mortgages.

I agree that reform of the finance industry is needed - but a blanket "no-one need pay interest on their mortgages for 5 years" is a sledgehammer way to do it. There are many people paying a reasonable rate of interest on a mortgage they can afford - giving them thousands of dollars, when people who rent, or own their house outright, get nothing, is not a fair, or needed, distribution. And I'm still unsure what you meant by "mortgages to be paid to the treasury directly".