Mortgage Crises - The Solution
Commentary from the Editor

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The Daily Manumitter
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Mortgage Crises - The Solution

The answer to the mortgage crisis is simple. The solution would help the economy and not modify the ultimate terms of the loans for homeowners facing crisis. To solve the mortgage crises - the government would only need to take over those loans where people have been layed off from work and then based on their financial situation - the homeowner make a payment of 25%, 50% or 75% or the original mortgage payment for a two year period. The amount not paid- would go to the end of loan - so when the home is eventually sold - the mortgage would be paid in full based on the original terms of the contract. If the home is never sold- the amount just goes to the end of the loan and you would keep making payments until the loan is paid in full.

This solves all issues... because no one is given better terms than another- you are still held to the terms of your original contract and people would have assurance that their payment would be affordable and fixed for a two year period. Your home is your largest monthly expenditure and with it being reduced for a short fixed period of time consumers would not fear and have money to spend.

If you did not get layed off from work and you cannot make your payment- that is where the free market and capitalism takes over. In that situation- it would be up to your mortgage company to determine if they wanted to refinance or foreclose if you were behind on your payments. However- the mortgage companies would benefit if they would take the arrears of a homeowner in default and place it at the end of the mortgage.

Written by Thomas George