Ok, I am no brain surgeon, but I have been in finance and accounting for over 20 years, so I have pretty good instinct when it comes to money. I doubt my humble mind could grasp the size and extent of the dollars involved in the mortgage crisis this country is currently going through, I mean, who can really imagine what hundreds of billions of dollars really is…but I digress. The way I see it there are two major issues facing homeowners and banks right now. 1) Adjustable rate mortagages that went way up and homeowners can no longer afford the payments and 2) Unemployment that has reduced or completely eliminated a homeowners ability to pay their mortgage. Here is my fix. The US government has to immediately REQUIRE all US banks that handle mortgages to refinance everyone in the US at 100% of current loan balance and at a 3-5% interest rate. For free. Homeowners who have reduced income due to job loss should get the lower rates and homeowners who are employed should get the higher rate, which is still lower than pretty much anyone could get now.

Now don’t say those interest rates are too low and the banks can’t survive on that. That is total bullshit. If the rates are low enough that people can afford their payments, then there is no defaulting, no bankruptcies and the steady stream of income from everyone keeping their homes will provide more income then higher rate mortages that force people to loose their homes. A guaranteed smaller amount of income is healthier long term than higher income that results in higher rates of default. Common sense mixed with some consideration for the hard working people in our country who are struggling, most through no fault of their own.

I admit when the mortgage crisis first started I had little sympathy for the people affected. I mean who is their right mind would give a loan for a $250,000 house to a single mom who makes $12 an hour? What kind of idiot came up with that idea? Did anyone really think an uneducated waitress is ever going to be able to afford the notes on that house once it is no longer interest only? Give me a break. I really did not feel sorry for people who signed into those kinds of loans because they bit off more than they could chew and now have to pay the price. Should those loans be legal? No. But were those homeoweners resposible for their own messes? Yes. Well, then along came the economic crash and the layoffs and there went my self rightousness and indignation. Now people everywhere are loosing everything and they cant do anything to fix it. NOW it is time for the government to step in and fix it for them. For all of us.

We could be next and if either of us lost our jobs we could not live the way we do now on one income. We would loose the cars for sure, though probably be able to keep the house if we gave up the car notes and cell phones and other luxuries. However, if the government required all banks to refinance all mortgages, not just the ones in repo now, then everyone would have a better chance of surviving this recession, and as the economy continues to struggle and more people loose their jobs, the more likely people will still be able to live in their homes, feed their children and be viable parts of the community.

Come on, you cant tell me one of the financial geniouses in DC has not thought of this. So do it, MAKE the damn banks cooperate. Dont make it voluntary like now. None of them are giving out loans with all those billions of dollars they got from the government. They are just sitting on it -which is wrong and needs to be stopped. Force them to comply or remove their licenses to issue mortgages, car loans etc.

My idea could work for auto loans too and help keep the auto companies in business. All car loans should get a flat rate of, say 9% at the highest for anyone who is employed and makes enough to cover the payment. Fuck the credit bureaus and credit scores. They mean nothing nowadays. They are just an excuse for banks to rip off customers with super high interest rates because they didnt pay a $200 medical bill 5 years ago. Credit scores should be limited to reporting 1) Actively open revolving accounts and 2) Bills incurred within the last 12 months. Thats it. Just because I didnt pay a bill 4 years ago doesn’t make me a dead beat. It doesn’t mean I will be late on a car note and doesn’t mean I won’t pay my house note. I don’t think credit should have ANYTHING to do with refinancing of home or getting car loans right now. It should be income vs affordable payment and the lowest interest rate possible.

Keep people in their homes. Let them buy cars and keep Americans working. Get the economy working and money flowing and make the banks step up and take resposibility for the mess they created out of greediness. They can take a hit on their huge profits for a few years to get the country back in it’s feet. And don’t even get me started on credit cards. Grrr. Ok, theres my idea. Mr. President, you can fix this mess and it is really this easy. So do it. Thank you.