This Plan will-

-Allow more Americans to stay in their current homes.
-Stop the amount of foreclosures.
-Banks and Financial Institutions become stable.  Wall Street will once again want to buy these mortgage backed securities now that they know  exactly what they are buying.
-Mortgages become safe as long as Americans have jobs.
-Housing demand will increase as home inventory decreases.

Here is the Plan

-Make payments affordable. Keep the current mortgage interest rate fixed at the original rate for the rest of the homeowners life, or until they sell or refinance the home.

Let all homeowners pay interest only. If they choose to pay principal they may.

Have the new interest rate at 4%.  This is twice the interest rate that many lenders are using in their loan modifications.

If Americans know that they can live in their home forever, without the worry of foreclosure due to rising rates and payments or dropping values they will stay.

-The Banks and Financial Institutions get paid. How can the Banks and financial institutions receive payment of principal in full when the borrower is only paying interest and at an interest that was less than originally agreed upon? I propose that each homeowner purchase a life insurance policy with the holder of the mortgage backed security as the beneficiary.  This premium is paid with the payment by the homeowner. This will guarantee eventually the principal will be paid.

-Bring in the private sector

Bringing in the Life Insurance companies accomplishes Two Things:

1. The banks know that the outstanding loan balance is essentially guaranteed even if the homeowner passes away.
2. It keeps this ’security’ issue in the hands of the Private Sector vs. using Public Taxpayer dollars.

The Life Insurance companies have incredible amounts of money.  The banks will surely be satisfied to hold a life policy as security.

Additionally, the Life companies ‘could’ view the individual policyholders as part of a single LARGE organization.  Similar to when many, but not all, employees of a company take the Voluntary Life program options.

By thinking of this plan as a ‘Group Plan’ the carrier(s) can give terrific schedule credits and come up with a minimum Guaranteed Issue (GI)level.  My thoughts are that if they were to make this GI level about $250,000 that many/most of the mortgages around the country could fall into that category.

How can I, the American Homeowner stay in my house?  A home to me is where I live.  It is my sanctuary.  I have pride in it.  I take care of it.  I use to enjoy pulling up to my home after a hard days work, getting out of my car, looking at the fresh neatly groomed grass taking notice at how much the trees have grown, being excited to walk through the door, but today, it is difficult to enjoy my home.
All I see now is how am I ever going to pay it off?  I now owe more than what it is worth.  What happens in two years, five years, when payments go up, when I have used all of my savings that I thought would be my retirement?  Why should I stay in it in when everyone else is walking away?

Will the banks be paid in full?  Currently it is being proposed that is in America’s best interest that the U.S. Government be allowed to buy mortgages for pennies on the dollar, then resell them to other investors at a higher price?  Government officials tell us this will not cost the taxpayer.  Government officials say  the taxpayer may actually make money.   Our representatives say that this will prop up the price of Banks, who no longer know what their own value is.

But what value does Wall Street see in these mortgage backed securities? The only reason hedge funds and Investment institutions would be willing to buy mortgage backed securities from the United States Government is if they can make a profit.  But how can Wall Street make a profit if the loan has not performed or is not performing? Because hedge funds and investment firms know that if the Homeowner defaults, the purchasers of these notes will be able to get a deficiency judgment against the homeowner.  But how does this keep Americans in their homes?

-Keep America in their homes.  Why? We must stop families from walking away from their homes.  Keeping Americans in their homes will reduce the number of homes available for sale. This reduction in inventory will stabilize home prices. This plan will help homeowners stay in their homes.  How, simple- supply and demand.  The more homes available due to foreclosure and short sales the prices must go down, the less homes available prices can stabilize.  My plan will keep Americans in their homes.

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