In fixing the foreclosure problem we must consider helping not only the people that need a small amount of help because their interest rate went up and they have gotten behind. We must help the people that have lost their jobs and will not be able to afford their payments until either they get a job or until their household income goes up by someone else in the household getting a job or a second job. Going through the process of a refinance just to lower the payment a small percentage may not be adequate enough for those households with a loss of income. What is needed for households in this situation is a grace period for the economy to rebound and unemployment to go down. When that happens the housing market should stabilize and go back to normal. We also do not want to see the banks take too much of a loss. When foreclosing on a majority of the properties that are in "crisis" the market valve is often much lower than the balance owed. What is needed is a happy medium between foreclosure, which in most cases everyone losses, and helping someone pay a mortgage that is considerable higher than the value of home they are paying it on. This plan known as plan A should by average help both the banks and the people being foreclosed on or when foreclosure is in the short future because of a loss in family income from unemployment or for some other reason.
To qualify for plan A the household must prove a loss of income. They must provide at least the last three years of tax returns with the latter showing less income to prove a need for help. They will be allowed to go back further however the loss of income must have been within the last say five years proving the loss has come from the latest...
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...peat until everyone is in a home they came afford.
Where do we get the money? Remember the money is being loaned not given. First we can use some of the money that was repaid to us from the loans make to the banks to keep them going. What better way to use it than to further help the economy. Second we are loaning the money out using a system similar to FAFSA why not use the same lenders on that list with the same terms. The interest rates should be better considering the loans are for secured mortgages and not student loans. Payback percentages should be higher since they still have a chance of being foreclosed on.
This program should help a large number of people facing foreclosure. With any kind of luck some of the other problems that helped get us in this mess will also get fixed. God bless us all. I still thing we live in the greatest nation in the world.
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