Mortgage bailout ideas!

[tommyhil4_6]

I am writing a paper about the recently proposed mortgage bailout. I am to view my professor as a financial analyst or something of that sort.

I was curious as to if you were the "analyst" what topics would you be most interested in (at least 4), also what is most important to you and why? I need as many ideas as possible!

PLEASE keep this as a helpful thread and not turn it into a he said she said fest of lameness!

Thanks for any and all suggestions!

-Thomas :rockon:

 

[jimmy77]

1. Close the (non) Federal reserve down.
2. All eligible loans will have the option of being refinanced(by the U.S. treasury) at 1%...that includes existing loans NOT in trouble. Gotta be fair, right?
3. While we're at it, why not do car loans and credit cards the same way.
4. The banks will only loan what they actually have. Those loans will be to the folks who can't qualify under the Treasury's terms. Those banks should do well now that they got rid of all their loans to the treasury and they will handle all my extra cash now that I pay darn little interest. This country can no longer afford to pay interest....a lot of bankers will need to get real jobs now. Car companies will not have to tie capitol up giving loans...they will come from the Treasury.
5. The government will set the debt to earnings ratio. If you don't qualify, you then borrow from the banks...at a higher interest rate.
6. The really cool thing is that ALL interest(except the higher bank loans) will go straight back to the treasury. Which basically means you're borrowing from yourself.
7. This plan would free up a ton of dough for the common man...which is the guy who keeps the economy going...we spend our cash.


The current plan is a smokescreen to make you think the gov is doing something. The wealthy are gonna end up with a whole bunch of cheap property......and YOU and I are gonna pick up the tab for it. Forget about the proposed plan...it will not prevent millions of homes from being foreclosed on. Besides, why should my tax money be used to bailout deadbeats? I don't even own a home....so why should I pay so somebody else can keep the one they can't afford? Check this out: If you borrowed 250k at 5% you're payment would be over 1300 bucks a month. If you took the same payment out for 1%, you're payment would be 804 a month...500 bucks a month! Many folks with arms have a much higher rate than 5%. This plan would also halt the slide in home values too....which would also keep the local tax base strong. Go look at am amortization chart...go look at how much you're paying in interest the first years..a bunch. The 1% plan would start giving you instant equity from day 1. This plan would also shrink the glut of homes quickly. Here's a tidbit for you: Guess how many years it would take for you're principal to exceed you're interest that you pay every month? 15 years+ Guess how long on a 1% loan? 1 month...yes the very first month! Here's the final tidbit: Guess how much you pay interest in interest over the life of the loan at 5%? 233,000!!! at 1% you'd pay 39,000...for a grand total of 194,000 dollars in savings!

 

[Fugazied]

1) The federal reserve has obviously failed. Kill it.

2) Rework the fractional reserve concept, so more real money is required by banks. When banks have $10 and are able to multiply that into $100'000 of virtual currency in the system there is obviously an issue. As soon as debts are called in it crashes like a house of cards

3) Re-regulate the financial sector. The greed of the banks and the drive to provide mortgage derivatives to overseas investors caused the banks to loan money to ANYONE, including 650k loans to part time workers and loans to DEAD people.

4) Nationalize the banks to get credit flowing again. It's not socialism, it's been done before by countries facing this issue (where banks are reluctant to loan money). Currently that bailout money is simply buying bad debt and floating the stock price of the banks - simply put, a lot of the government money is bailing out bank investors and not helping getting money back into the system.

Once credit is flowing and economy has stablized, privatise the banks again.

 

[tommyhil4_6]

TTT! Thanks for all the ideas so far!

 

[tommyhil4_6]

Also anyone have any good reference sites based on the background of this current bailout and what was initially proposed etc? I am having a real pain in the ass time sifting through these sites for any good information that isn't just blaming the other party.

 

[stangin99]

LOL @ everyone saying to close/kill the federal reserve.