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.