posted on Sep, 26 2008 @ 03:37 PM
There is an easy solution to this problem that will satisfy homeowners, taxpayers and the institutions that caused the problem. We don't need an
The problem centers around loans that have dramatically increased their interest rates on supposed unsuspecting homeowners (even tho they could have
read it in bold print on their loan documents) and on unscrupulous lenders who permitted mortgages to be given to people who did not have the means to
Since it centers on professional lenders, they should be the ones who are penalized.
Here's the simple solution: make a law that changes the terms of all sub-prime loans. The law would read that, instead of changing interest to the
higher rate virtually overnight at the end of the term (1-5 yrs typically), extend the term to 10 years and allow the interest to increase
incrementally (the rate jump divided by 10, per year).
This would penalize the lenders, but allow them to still have "good" loans on the books. This would allow homeowners to (1) keep their homes and
(2) increase their incomes more gradually to overcome the rate/month increases in their mortgage monthly payment.
The lenders get to stay in business, any bailouts are minimized and graduated over 10 years, and the value of your home and my home remains stable.
It also allows the homeowners in trouble to maintain their credit, helping the banking system.
End of problem. Questions, anyone?