My solution to the foreclosure crisis

Posted on August 3rd, 2010 by Mark Stopa

There’s no sense in belaboring the point any longer.  For me, the solution to the foreclosure crisis is clear:

Reduce the principal on every mortgage on every owner-occupied home in America such that the mortgage is no greater than the home’s present value.

Is this a radical solution?  Absolutely.  But let me ask you this: who would it harm?  Banks?  Please.  The banks got bailed out – with OUR tax dollars.  The bailout has enabled banks to recover, so much so that they’re now earning record profits, while mainstream America continues to suffer.     

When do the American people get their bailout? 

How many millions of Americans need to be foreclosed before the U.S. government steps in?  I don’t want to turn this into a political debate, but what I find most ironic about Obama’s failure to act in response to the foreclosure crisis is that, prior to the election, he was criticized as a socialist, wanting to take from the rich to give to the poor, yet exactly the opposite is happening:

with every foreclosure, the rich are getting richer at alarming rates while the poor and middle class continue to suffer.

It’s absolutely amazing to me that so much wealth is being transferred from the middle class and the poor to the rich – right under the nose of a Democractic president.

Anyway, would reducing every mortgage on owner-occupied properties to the current value of the property be a radical solution?  Absolutely.  Some people would argue this would be unfair to homeowners who’ve paid their mortgages.  I’m not oblivious to such arguments.  However, what’s our alternative?  Continuing to foreclose on thousands of homes every day?  Continuing to allow banks to earn billions and billions of dollars while the public suffers? Haven’t we seen by now that helping banks isn’t going to help Americans, the public at large, or the economy as a whole?  Banks only care about themselves and the profits of their CEOs – helping banks isn’t going to improve our economy.  For me, this all begs the question:  

Where are we headed here? 

In five years, are banks going to own 25% of all real estate in the United States?  30% 40%?  

Can you imagine how our economy would function with banks controlling that much real estate?  It’s a scary thought. 

Times like these are why we have a President.  Mr. Obama, it’s time for you to get involved and make a difference.  If you wait five years, or even two years, it will be too late.  Right now is the time to

Reduce the mortgage on every owner-occupied home to its present value. 

Of course, unless and until something like this happens, it’s incumbent upon homeowners facing foreclosure to retain a competent foreclosure defense attorney.  You never know – if you don’t give up, and hire an attorney to defend your case, maybe the government will do something like this, enabling you to keep your home (whereas if you give up, you’ll lose your home forever). 

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