I agree with Kaptur, Kucinch and Obama, so I offer my own complementary plan:
My plan also focuses on preserving home ownership; however, I'll do it by aligning mortgage payments with the market value of their properties. Lenders would be mandated to refinance existing mortgages to sub prime borrowers (exclusive of investors) at risk of foreclosure.
The refinancing packages would come with a subsidy of between 5% and 30% of principal; long-term, fixed rates; transferability; and default insurance.
The result is greater affordability, stability as well as liquidity.
I figure such a package costs upwards of $360 billion, or about half of what Bush wants to give to Wall Street. However, the the cost to the public diminishes over time as the housing market stabilizes and homes begin selling at appreciated values.
I would add repayment clauses to reclaim all or partial payment on the subsidies for homes selling at appreciated values. Additionally, I would add a transaction surcharge on exotic and large Wall Street transactions, and on executive pay, bonuses and dividends in order to re-coup the public investment.
I would also institute tighter oversight and enhanced regulation over the credit markets; outlaw certain Wall Street practices which do nothing but generate huge fees; prosecute Wall Street executives, mortgage brokers, real estate brokers and others involved in deceptive practices and/or shirking their fiduciary responsibilities; and I would only license the selling and packaging of mortgages and mortgage products to insured, bonded and regulated institutions, banks and consumer credit unions.
What say you?
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