In Defense Of Banks

For the first time in history someone is hated more than lawyers. Bankers. I know, I know. This entire nightmare is all due to greedy bankers.

Bullshit.

Sure, bankers twisted things around so they could make unbelievable amounts of money. I remember seeing commercials for loans for 125% the value of your house. I don't see how that could have been legal, but they did it. What they didn't do was put a gun to anyone's head and force them to take out these loans. People thought they could get rich off the increase in their house's value. And they could have if they were just patient, but they were just as greedy as the bankers. And as far as I'm concerned, anybody stupid enough to take out a loan for more than their house is worth, or agrees to a balloon loan, needs looking after.

Improved Plan

I've pretty much accepted the fact that my idea is never going to see the light of day. That doesn't mean I quit thinking about it. As a matter of fact, I've improved it again. I still think just giving banks so much money will piss off the average working man something fierce. I think my basic emergency assistance idea is a good idea. Make people sit down with the bank and the government and hammer out new loans. I think the banks should be given a choice. If the house isn't worth the amount of the current loan they could either set up a new loan or insist on the full amount. If they insist on the full amount the Fannie or Freddy would pay the bank off and set the homeowner up with a loan for the actual value of their house. On the other hand, if they agree to refinance the government would loan them the difference. Plus for every dollar the bank refinances the government would spend a dollar buying houses the bank has already foreclosed on. This way it's not just the banks raking in money hand over fist, the average homeowner would get a boost, too.

To encourage the bank to just refinance loans the government would set up a web site listing each banks statistics: the basics like how many loans they have out, the total amount of the loans and how much their monthly income should bring compared to how much they actually get due to people not being able to pay their loans. Plus the percentage of refinancing loans approved and denied and how much more the government had to pay. Also, each bank's president, vice president, and board of directors should be listed, along with their contact information and salary.

As far as the buyout, I don't think the government should immediately buy the houses. Instead, they should agree to make the next 12 payments on your old house. Then if you sell your house within a year you would get a bonus to split with your real estate agent.

Anyway, this is what I think should happen. What will probably actually happen is the government will just hand over the money. The banks might say thank you. Probably not.

Project Cud

I know I’m not the only one worried about the economy. Fortunately, I have a plan. Instead of a Wall Street bailout what we need is a Main Street buyout. After the Great Flood of 93 the government bought my house and helped me move out of the flood plain. If they could do that, why can't they do the same thing for people who are struggling with gas prices instead of floodwater?

Here’s my plan.

Say I live 50 miles from work. I would just have to find a house 25 miles from work or less. Then the government would pay off my house loan and help me get a loan for the house I want to buy. This would give the banks money to lend to other people, cut my transportation cost in half, reduce not only our dependence of foreign oil but emissions, too. It would even improve traffic problems for everybody.

Special categories could be made for senior citizens and people on disability. They could move wherever they wanted to. Military families would also get special consideration. Houses the government buys that are close to colleges or trade schools could be set aside for people who are unemployed that want to go back to school. Houses could also be used for emergency housing for people like Hurricane Ike victims. After all, there are always hurricanes, tornadoes, floods, and fires that destroy people's homes, not to mention just plain homeless people.

There are so many ways this idea helps the economy. It would spread the wealth to real estate agents and moving companies. Home improvement companies and hardware stores would see a jump in business. The idea of just handing over a pile of money wrapped with a bow to those greedy bankers who shouldn't have approved so many of their loans in the first place really pisses off the average working man, but I think everybody would go for this plan. You could get the buyout if your house was worth $50,000 or $500,000, although I think if my house was worth $500,000 I would be embarrassed to ask the government for money. Even people who already live close to work and don't qualify for the buyout could sell their house to somebody who does and move wherever they want. Plus the house that's too far from my job might be right next door to someone else's job.

As an added bonus, I think if your house appraises at $100,000 but the loan is $120,000, the bank should just have to eat the difference. Banks can pay for a second assessment if they want to, but if they refuse a buyout they would be blacklisted and not get any money at all. If the loan is only $80,000, the homeowner can either use the extra money to increase the down payment for the new house or use it for home improvement or buy a new car, send their kids go college, anything. After all, shouldn’t we be rewarding the people who deserve it?

We would need somebody to cover the money aspect and somebody to handle the actual real estate side. This would give Fannie Mae and Freddy Mac something to do. After all, we own them now, we might as well get our money’s worth. HUD would be able to handle the housing side just fine. After all, it is in charge of housing and urban development, which this proposal is really all about.