I've seen no concerted or obvious effort to help American homeowners in mortgage trouble

[Phoebe Loosinhouse]

If it were up to me, I would open a whole slew of regional offices under the aegis of HUD or even the Treasury Department.

I would have homeowners come in with all their paperwork. I would issue a notice to the bank or mortgage company that the mortgage is suspended temporarily and under Federal Review and Control.

If there is evidence of mortgage fraud on the part of the lender, the mortgage will be voided and rewritten with the Federal entity and the illegal obligation discharged with the new mortgage rewritten at current value.

If there is evidence of mortgage fraud on the part of the borrower, I would forward the property for termination or foreclosure.

If the mortgage is in arrears due to job loss, I would give a maximum one years forebearance with that year added into a rewritten mortgage. If at the end of a year, the person is still unable to afford the home, then they would have to face foreclosure.

For the foreclosed homes, I would undertake an effort to have the cities and towns have first dibs on them to start a municiple stock of homes for the homeless which could be rented out at very low rates by the cities to the homeless or jobless with a maximum of 2 years for the tenants. The goal is to provide good solid temporary but affordable housing for a long enough time for someone to save and get back on their feet so they can then go out into the independent housing market. One muniple housing lease per customer -in other words, no renewals or moving to another municiple lease. This would be a good faith effort by the city or town to do some worthwhile shorterm housing assistance that could actually make a difference as opposed to homeless shelters.

[babylonsister]

1. There is some activity...

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=389&topic_id=4660876
Democrats Readying Legislation in Case Treasury Asks for More TARP Funds

[OwnedByFerrets]

2. Hard to see what isnt there.....unless of course, you are making

the case for war against a country you want to invade and steal its oil.

[sinkingfeeling]

3. Here's a question, is it worth bailing out a homeowner that has no equity in the property? A large

number of people approaching foreclosure either own considerably more on their houses than they are currently worth, due to either falling real estate prices or for having removed equity to pay off/buy other things. Some put nothing down and financed 100% of their purchase.

I read an article Monday that argued that banks/lenders would be the true beneficiaries of a federal program to 'rewrite' mortgages. People who are in the trouble now might be able to hang on to the houses under a new mortgage for one or two years before finding themselves back in the same mess by being 'underwater'.

Wouldn't it be wiser to take the billions of dollars and use that to extend unemployment benefits, food stamps, and other public assistance?

[Phoebe Loosinhouse]

5. It depends on if you are looking at the property as investment or as shelter

There have been real estate bubbles before. Previously, it has taken approximately 10 years to completely cycle from high point to bust to reattainment of high point. After the S&L debacle there was a lot of previously overvalued real estate. I lived in New England then which was not really impacted too much by the S&Ls which seemed to be more Southern and Western. But, there was still a boom and bust in New England. The hardy New Englanders just hunkered down for the most part and did not go into foreclosure but just gritted their teeth and paid the mortgages on their underwater properties. In time the properties recovered and they were no longer underwater. I remember For Sale By Owners being for sale for years because the owners refused to reduce the price, but eventually the market caught up to them and they sold

But, I do believe that it was very common in the S&L states to just hand over the keys and say "I'm outta here!". I think the Southern and Western populations were more transient in general than the crusty moss covered New Englanders who hated to move out of their ancestral haunts.

So what I am trying to say is that if you bought property even with nothing down because you loved the house and felt like it would be your long term shelter, you're more likely to stay. If you bought with the idea, "this will do for now and in 2 years we'll flip it and buy something better" than you have no real emotional ties to the property. In the second case, many probably would be happy to walk more than stay.

I think this bubble is different from others in terms of size and scope. I think it may be years and years before we see values get to back to the height, if ever. Many people do not realize that TO THIS DAY Japanese real estate has not returned to the heights of the eighties. The Japanese made the decision like the New Englanders to just suck it up. I believe that I have read that some 100 year mortgages were written in order to keep people in homes and the banks from being declared insolvent.

[PSPS]

4. Your heart is in the right place, but this is misguided

The root of this housing/mortgage debacle is the Option-ARM no-doc loan, also referred to as the "liar's loan."

These loans were available to anyone without any documentation of income or debt. People would just think up a number for their income and everything flowed from that. This is what caused housing prices to become two or three times (sometimes more) what they should have been. There was so much money floating around that it created an artificial level of demand. And the payment terms ("pick-a-payment") were designed to allow for negative amortization, and most were choosing the "skip this payment" option.

The last thing I want to see happen is for the US taxpayer to buy these people's houses for them. If they are having a hard time making the mortgage payment on their $750K house because their true income is $24K/year, then they should lose the house. They should be renting.

[Phoebe Loosinhouse]

6. But I wouldn't be trying to save 24K earners living in a 750K house

I think this falls under the terms of a fraud. If they just made up an income, then, yes they should lose the house. I completely agree with you.

I also think negative amortization loans should be illegal.