Quorum-Laurelhurst Seattle Real Estate Blog


 

Bailout Alternative
by Jenn Flynn
I’ve got a bailout alternative idea. Since this whole crisis started with sub-prime loans being made to people who could not afford the loan once the adjustable rate started going up. Why doesn’t the government step in and mandate that the mortgage companies return those adjustable rates to the initial rate that the homeowner’s qualified for and set it as a fixed loan.

Instead of the tax payers being left holding the bag for some unknown number (since 700 Billion is just an estimate). The mortgage companies will just be forced to take the impact as if all of those had been fixed rate loans. So they won’t make as much, but they are going under at alarming rates anyways. And then the homeowners facing foreclosure will be able to afford their loan again, thus not being forced into foreclosure. Then the number of homes on the market will go back down….

what do you think?
Posted 2008-09-30