A Common-Sense Plan to Stabilize the Markets, Stop The Death Spiral of Decreasing Property Values, Halt Foreclosures and Keep Americans In Their Homes
President Bush signed into law the hotly-debated financial bailout plan on October 3, 2008. In doing so, the real problem was not solved. We need to keep homeowners in their homes with affordable monthly mortgage payments and stabilize the “death spiral” in the housing market. Period.
That being said, I have a plan. If you like, share it. Email it. Blog about it. Send it to your Congressman. The only way this will happen is if you spread the word. So spread it.
The Problem
America is faced with the biggest housing crisis, and due to the ripple effect, potentially the biggest overall “financial crisis” in the nation’s history. Although there are still some details to resolve, this paper will set forth an analysis of the problem and propose a solution that is clear, sensible and attacks the problem where it needs to be;:
At the ground level.
There are three categories of homeowners who are defaulting on their mortgages:
1) Involuntarily: Homeowners who simply cannot afford the payments;
OR
2) Begrudgingly: Homeowners on the borderline of making their payments, but too many disincentives exist, in addition to the “stretch” of the payment itself, which pushes this group of homeowners to the default side of the ledger;
OR
3) Willingly: Homeowners who can afford the monthly payments but choose to “hand in their keys” rather than continue to lose money each and every month.
If we do not stop the tidal wave of defaults and foreclosures, the housing market will continue to erode as more and more inventory floods the marketplace.
