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Fixing the "Main Street" housing crisis could have been easy.

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SoCalDem Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-06-08 06:22 PM
Original message
Fixing the "Main Street" housing crisis could have been easy.
And, it could have cost a LOT less.

First they needed to identify just WHO really "owned" these houses in, or near foreclosure.

Then they needed to have an organization (yeh, I know) set out to analyze these mortgages, set them up with fixed rates, for the ones who had been IN a house for say..5 years..and who actually could afford their (a) house payment could have been helped to catch up (a low interest loan) on missed payments. A window of "participation" would have to have been part of the plan.. miss more payments, and you lose..

For people who could NOT pay a mortgage (after adjustment), there should have been an option to forfeit the house (they probably had nothing IN it anyway), but would be allowed/encouraged to stay there as RENTERS, for a fair rent, based on prevailing rates..(anything the bank/mortgage holder got would be more than the risk of having the place vandalized). These "rentals" would be on a month-to-month basis, with the agreement that if the house did sell, they would then have a month to find a new place to live..or they could move to another "distressed" home that was empty.

For people who conned their way into a house they could never realistically afford, or for the speculators who over-bought...well they would have had the priviledge of living in a place they could never afford, and it;s tme for them to move on.. "Helping" a $15 an hour person live in a $400K house is a diamond-studded pipe-dream, and they need to ferret out these would-be buyers and eliminate them from the "bailout"..

This would solve three problems..affordable housing for many (formerly) middle class people, keep school enrollment in the areas stable, and avoid neighborhood blight.

BUT..this was probably not even considered, because it would undoubtedly expose the "phantom" mortgages that were created out of thin air...and the banks would have to eat them..

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w4rma Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-06-08 06:27 PM
Response to Original message
1. Bush and Wall Street pushed this right before the election, to force Dems to give them this money.
It was never about the economy. It was always about large multinationals and the ultra-wealthy wanting more money.
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TomInTib Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-06-08 06:29 PM
Response to Original message
2. Nah... Waaaaay too logical.
Where would that leave the Money Boys? If they cannot make money on it, it just ain't gonna happen.
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ben_meyers Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-06-08 06:30 PM
Response to Original message
3. As long as we are dreaming, preventing the crisis
would have been easier still. If someone would have vetoed the 1999 Gramm-Leach-Bliley Financial Services Modernization Act that repealed many of the provisions of The Glass-Steagall Act of 1933 most of where we are today wouldn't have happened.

But someone would have to have been paying attention and not ducking ashtrays and lamps.
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Waiting For Everyman Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-06-08 06:37 PM
Response to Original message
4. Hope Now was supposed to do something like that, but they don't.
And there's very little modifying going on. What is, is spotty and arbitrary.

I just found out I don't qualify for the new streamlined modifications for instance because I have a VA loan. VA rules won't allow it whereas FHA or conventional would. How dumb is that? I thought they were supposed to be on the vets' side.
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