My New Recovery Plan!!!

[JBaker45]

I just had a brilliant thought (if I do say so myself).

Instead of spending billions of dollars on special projects and bailouts for finance companies, how about this..

The government pays off all outstanding balances our primary residential home loans across the country.

Not only does this solidify the home loan agencies, but it relieves unemployed and struggling home owners of having to make any more load payments. Plus, the money no longer being used to make mortgage payment will undoubtedly be put back into the economy through the purchase of items people would not have been able to afford.

This sounds like a win-win deal for everybody to me.

What do you guys think, should we send this idea to Washington or not? :smile:

[Tallen]

Personally I am against any bailouts. The economy is self-correcting if it is left alone.

I think the best bail-out program we can get is to replace the incumbants with those that will work for the people..., not against them.

[JBaker45]

Personally I am against any bailouts. The economy is self-correcting if it is left alone.

I think the best bail-out program we can get is to replace the incumbants with those that will work for the people..., not against them.
I think that the error that was committed in the home-loan industry has been corrected that this point.
(That error being the issuing of an excess of unsecured home loans.)

My understanding is that this error has already been corrected, and should not happen again.
If we want to repair the damage that was done, then my proposal seems like a good way.

The home loan agencies are made solvent, while at the same time the 'bail-out' money (having been placed into the hands of the dept owners) is now able to be re-injected back into our economy through the purchase of diverse produce and services (maybe even new cars) that would otherwise have never been possible.

[Tallen]

I think that the error that was committed in the home-loan industry has been corrected that this point.
(That error being the issuing of an excess of unsecured home loans.)

My understanding is that this error has already been corrected, and should not happen again.
If we want to repair the damage that was done, then my proposal seems like a good way.

The home loan agencies are made solvent, while at the same time the 'bail-out' money (having been placed into the hands of the dept owners) is now able to be re-injected back into our economy through the purchase of diverse produce and services (maybe even new cars) that would otherwise have never been possible.

If we are going to spend money for a bailout, that would probably be a good way to go. Would we pay off the loan for folks that owed on a $10 million loan?

[JBaker45]

If we are going to spend money for a bailout, that would probably be a good way to go. Would we pay off the loan for folks that owed on a $10 million loan?
I have no problem with putting a cap on this so that we are not buying people 'luxury' homes.

The basic idea is that people from coast to coast all benefit from the program, and that the money therefore is also made available to the economy from coast to coast. ;-)

[Tallen]

I wonder how many trillions of dollars this would take?

[JBaker45]

I wonder how many trillions of dollars this would take?
They're already talking trillions now.

The question now is : how would all this money be best spent.

[JBaker45]

Lol.. With this kind of money, we could buy everybody a house! :smile:

[Tallen]

They're already talking trillions now.

I know, it may be the downfall of the country in my thinking.


The question now is : how would all this money be best spent.

It would be best spent if they gave it all to me. :BigB:

But since they made up their dad-gum minds that they are going to spend it anyway, the majority of it should go to the common man in some form. But that will never happen.

[JBaker45]

It would be best spent if they gave it all to me. :BigB:
ROTFL!

[Tallen]

What would that be if it is a trillion? 10 million $100,000 homes? That would probably be enough to give everyone a house some place.

[JBaker45]

What would that be if it is a trillion? 10 million $100,000 homes? That would probably be enough to give everyone a house some place.
Well, I sent my suggestion to whitehouse.gov. Maybe Obama will take a look at it. :pray:

[Tallen]

Well, I sent my suggestion to whitehouse.gov. Maybe Obama will take a look at it. :pray:

If they pay my morgage off John, I'll send you a steak dinner. I don't owe very much, but I would like to get rid of the payment.

[travelah]

I wonder how many trillions of dollars this would take?

Fannie & Freddie ALONE hold over $5.4T of debt or guarantees. In 2007 , there was just under $11T of mortgage debt. John's idea is not feasible. What makes this worse is that mortgages are leveraged 15-20 times over meaning equity is very low proportionately.
Secondly, capping mortgages would not necessarily work well especially when you compare the "average" California median price with that in South Carolina. The folks in SC would be receiving "luxury" homes paid off while the Californians get their 3/2 ranch paid for.

[JBaker45]

Fannie & Freddie ALONE hold over $5.4T of debt or guarantees. In 2007 , there was just under $11T of mortgage debt. John's idea is not feasible. What makes this worse is that mortgages are leveraged 15-20 times over meaning equity is very low proportionately.
Secondly, capping mortgages would not necessarily work well especially when you compare the "average" California median price with that in South Carolina. The folks in SC would be receiving "luxury" homes paid off while the Californians get their 3/2 ranch paid for.
I am proposing that the primary residential debt (under some cap1) be purchased.

This is a fraction of the total F&F debt, but it is the fraction that was abused; and this is the area in which the damage (that needs to be repaired) was done.


Thanks for your consideration,
John


(1) This cap is a cap on the value of the outstanding primary home loan that would be covered, not a cap on future mortgages. Remember, this would be a one time buy out.

[raderag]

I just had a brilliant thought (if I do say so myself).

Instead of spending billions of dollars on special projects and bailouts for finance companies, how about this..

The government pays off all outstanding balances our primary residential home loans across the country.

Not only does this solidify the home loan agencies, but it relieves unemployed and struggling home owners of having to make any more load payments. Plus, the money no longer being used to make mortgage payment will undoubtedly be put back into the economy through the purchase of items people would not have been able to afford.

This sounds like a win-win deal for everybody to me.

What do you guys think, should we send this idea to Washington or not? :smile:

Well, except that it would cause housing prices to rise again, which means you are artificially propping up prices. Viola, a new bubble.

[Tallen]

Fannie & Freddie ALONE hold over $5.4T of debt or guarantees. In 2007 , there was just under $11T of mortgage debt. John's idea is not feasible. What makes this worse is that mortgages are leveraged 15-20 times over meaning equity is very low proportionately.
Secondly, capping mortgages would not necessarily work well especially when you compare the "average" California median price with that in South Carolina. The folks in SC would be receiving "luxury" homes paid off while the Californians get their 3/2 ranch paid for.

Then there would be the problems of folks that owed a few thousand dollars, and have faithfully paid their debt down. I am sure they would feel slighted in this model. Most of the rewards would go to folks that have the most debt, which is an unsound fiscal practice to begin with. We would be rewarding and encouraging more debt. What we need is to encourage less debt and more savings.

[JBaker45]

Then there would be the problems of folks that owed a few thousand dollars, and have faithfully paid their debt down. I am sure they would feel slighted in this model. Most of the rewards would go to folks that have the most debt, which is an unsound fiscal practice to begin with. We would be rewarding and encouraging more debt. What we need is to encourage less debt and more savings.
Good point.

Also (as you outlined up above), with the kind of money the Dems. have been proposing, the Gov. could paracticly buy everyone a house :smile:

[JBaker45]

Well, except that it would cause housing prices to rise again, which means you are artificially propping up prices. Viola, a new bubble.
I disagree.

The banks would naturally become solvent again, because the source of the original problem would be gone.

Plus, with the fresh influx of new cash in the hands of the borrowers (now available for spending on on things they feel they need), this money would be injected back into the economy through the purchase of maybe cars, big screen TV's, what ever the country from coast to coast wants to spend it on.

This would result in a huge burst in precisely the areas that the country at large wants to spend it on.

[raderag]

I disagree.

The banks would naturally become solvent again, because the source of the original problem would be gone.

Plus, with the fresh influx of new cash in the hands of the borrowers (now available for spending on on things they feel they need), this money would be injected back into the economy through the purchase of maybe cars, big screen TV's, what ever the country from coast to coast wants to spend it on.

This would result in a huge burst in precisely the areas that the country at large wants to spend it on.

John, doing this would be an attempt to repeal supply and demand. I think it is academic that prices would be higher.

[JBaker45]

John, doing this would be an attempt to repeal supply and demand. I think it is academic that prices would be higher.
The error that has already been made was that supply did not exceed demand.

The borrowers were not responsible for this error, our own Government was. We all will have to pay for that mistake.

The question is, what is the best way to make the appropriate reparations.

[JBaker45]

I should add that what I am proposing kills two birds with the same stone.

Instead of simply giving money to our loaning institutions and leaving everyone in debt; by giving that money to the borrowers themselves, no only are the loaning institutions restored to solvency again, but that money is then re-injected into our economy in precisely the areas that people across the country want to invest it in.

[tking]

I just had a brilliant thought (if I do say so myself).

Instead of spending billions of dollars on special projects and bailouts for finance companies, how about this..

The government pays off all outstanding balances our primary residential home loans across the country.

Not only does this solidify the home loan agencies, but it relieves unemployed and struggling home owners of having to make any more load payments. Plus, the money no longer being used to make mortgage payment will undoubtedly be put back into the economy through the purchase of items people would not have been able to afford.

This sounds like a win-win deal for everybody to me.

What do you guys think, should we send this idea to Washington or not? :smile:

In all seriousness, my husband and I have asked ourselves several times now why the government is so willing to give billions of dollars to the mortgage industry when having some sort of committee to evaluate the mortgages and come up with a "bailout" for some of the homeowners (even those in good standing) wouldn't be more beneficial. I mean really now...get a bailout, take a really nice vacation, give yourself a bonus...how does any of that actually help the economy other than to basically pat Fannie and Freddie on the back.

I've also wondered about the biblical principle of 7-year forgiveness.

[Tallen]

I've also wondered about the biblical principle of 7-year forgiveness.

Seriously, a fifty year Jubilee is the way to bailout an economy. All of the land goes back to the original owners and all debt forgiven. Then you start over. That way, it is forced upon people, to be fiscally aware and the debt at the end of the cycle gets paid down.

I think you and I where thinking along the same lines of thought here Terri.

As far as Freddie and Fanny, they have contributed millions and millions of dollars to the election campaigns..., now they are getting the pay back at our expense.

I am now thinking that with all this add debt to pay, several more Trillion, with the bailouts, the national budget for this year, and the new appropriations, we have set the world economy up for a real depression. There has to be a self correction in the economy as the world goes into bankruptcy. I think we are in for a longer haul than we may have bargained for now. It may be wise to get our financial ducks in a row and get out of debt as soon as we can.

[raderag]

Seriously, a fifty year Jubilee is the way to bailout an economy. All of the land goes back to the original owners and all debt forgiven. Then you start over. That way, it is forced upon people, to be fiscally aware and the debt at the end of the cycle gets paid down.


That is unworkable and would require vast amounts of theft from people that made legitimate purchases.

It would ignore all of our current laws. Now if you want to set that up for the future, that would be another thing.

[Tallen]

That is unworkable and would require vast amounts of theft from people that made legitimate purchases.

If they made "legitimate purchases" and are the rightful owner, how would that hurt them?


It would ignore all of our current laws.

Our current laws? Our current laws are allowing the government to take trillions of dollars from it's constituency and drive the worlds economy into further debt. Debt that is risking that economy and a total collapse that will cause a world wide depression to correct the condition.


Now if you want to set that up for the future, that would be another thing.

Well actually that was what I was thinking. Starting over with a new economic model that would account for ridding a society of debt and encourage a real value market. For instance, it would probably be in the best interest of those who loan to call in their loans and rid themselves of them at the end of the cycle. I would think it would be much harder to get a loan at the end of the cycle as opposed to the beginning where there would be quite awhile to pay on loans. It would force the economy to think in completely different terms and base it upon real value rather than debt.

[raderag]

If they made "legitimate purchases" and are the rightful owner, how would that hurt them?



most of the foreclosures have been sold several times. Are you going to confiscate property that was legally purchased?

[Tallen]

Are you going to confiscate property that was legally purchased?

No. The properties legal owner would remain with the current owner. The same could happen in the other economic model as well. If a covenant is made to sell the property (like houses) and transfer ownership from one person to another, the new owner would be the legal owner and retain ownership after the Jubalee. The Jubalee would be for debt and provision would be made to get rid of it. The exception would be on certain types of land. It would return to the original owner, but the houses and buildings within certain areas would not be taken back, like the Biblical model.

[JBaker45]

In all seriousness, my husband and I have asked ourselves several times now why the government is so willing to give billions of dollars to the mortgage industry when having some sort of committee to evaluate the mortgages and come up with a "bailout" for some of the homeowners (even those in good standing) wouldn't be more beneficial. I mean really now...get a bailout, take a really nice vacation, give yourself a bonus...how does any of that actually help the economy other than to basically pat Fannie and Freddie on the back.

I've also wondered about the biblical principle of 7-year forgiveness.
I hear you.

If distressed farmers had some of their debt removed, they could re-insert that money directly into the economy (where it is actually needed) through the purchase of new farm equipment, or irrigation (we need water here in CA).

There is simply no excuse for giving bail out money to anyone but the private citizens of this country.

[Tallen]

Probably will give the banks more funds to foreclose on the farmers who are already taking a beating from the economy.

Actually though, I read the farming is pretty stable in all of this and a good place to invest right now. I hope that's true.

[tking]

Probably will give the banks more funds to foreclose on the farmers who are already taking a beating from the economy.

Actually though, I read the farming is pretty stable in all of this and a good place to invest right now. I hope that's true.

...lol..just fyi.

We had a pleasant an unexpected surprise when John when to the bank the other morning to pay on our loan there. We've been having to deal with variable interest rates which meant out of a $12K payment per year, only about $1500 was going on principal. Needless to say, we haven't been happy and had already told our banker that we'd have to seek other lenders (probably the FSA which is what our land loan is through) cause we couldn't deal with that. It's taken us 4 years to pay down from $113K at the bank to $99K. That's nearly $48K of which only $14K went on principal. An explosion bout took place there last year over this mess (which we got into cause of the trust we placed in our banker, which is now gone, of course). So this year John goes, and they've dropped the interest from over 9% to 4.25%. John was pretty astounded (and I don't trust it for a second, but we'll take it for now). So that means that's over half our payment actually went against the principal!!! We're thrilled. FINALLY maybe we can make a little progress.

The reason I mention that is because all these mortgages and stuff can stand to be readjusted like this, and even some debt forgiven I'd think. Prime is about 1% or less, so anything over that is making money for the lenders. Theoretically, they could shave off some principal, put a much lower APR in place, and still be making money, and folks could stand to pay the mortgage, which would help the economy as well.

The difference in farming these last couple years is that the selling price of our goods is following the stock market. That's not the norm, really. So we're fluctuating each day just like the market is.

I'm not real sure what they mean by farming is stable. I mean..land is land and it doesn't rot like houses, so in that respect, it's always pretty stable if you've got the money to buy it. It's the crop situation that isn't so great. All in all, though, farm land has always been considered a good investment...especially if you can get someone to turn loose of the mineral rights and you can afford to buy them. It's not something I'd go in debt to do at this time, but for someone who has money they can let go of...yeah, it'd be a good investment. That's what gives John and I hope...the land ain't goin anywhere unless we have another dustbowl, and if that's the case, the government stands ready (believe me) to buy it and make it "government land." At least we aren't dependent on a company that might lay us off at any time. We're very, very thankful for that. And if all else fails, we can grind wheat and have bread and beef!