Post by The 99 Declaration on Feb 1, 2012 8:55:40 GMT -5
Foreclosure Moratorium, Mortgage Refinancing and Principle Write Downs. Adoption of an immediate plan to end the mortgage and foreclosure crisis. The Federal Reserve Bank shall not be permitted to make virtually interest-free loans to banks that hoard cash or invest it by trading on their own accounts in their own securities divisions. These cash-hoarding banks that refuse to loan to small businesses, consumers or write or refinance mortgages to credit-worthy people have selfishly extended the worst recession in American history. To end these practices, apart from reenacting Glass-Steagal, the federal government shall buy all “under-water” mortgages and debts in foreclosure and refinance these mortgages at an interest rate of 1% or less because that is the approximate “discount interest rate” (presently 0-.25%) the Federal Reserve charges the banks. Moreover, because the American taxpayers rescued these lending institutions after they greedily made risky loans, bundled these bad loans and then sold them off, the originators of these bad loans will be required to partner with the federal government to pay the cost of “principle write downs” on all foreclosed or underwater mortgages. These re-financed debts will be managed by the newly established Consumer Financial Protection Bureau, the current Freddie/Fannie trustees and an independent non-partisan foreclosure task force appointed and overseen by Congress and the Executive Branch. This task force will determine, on a case-by-case basis, whether foreclosure proceedings should continue based on the circumstances of each homeowner, the assistance refinancing and principle write downs would offer and the conduct of the financial institution when originating the loan. New direct loan mortgage programs will be offered to all homeowners by the federal government {who now own millions of these bad loans} at the discount window rate because the banking industry has proven itself unworthy of being the stewards of the American dream of home ownership.
