Organizing for America | las vegas foreclosure crisis and solutions: New Law to Solve Foreclosure Crisis

Post from las vegas foreclosure crisis and solutions:

New Law to Solve Foreclosure Crisis

By James from North Las Vegas, NV - Dec 14th, 2008 at 2:38 pm EST

Comments | Mail to a Friend | Report Objectionable Content

Tags: bailout, banks, economy, foreclosures, housing crisis, Las Vegas, lending, loans, mortgages, recession, Subprime, vegas

I started this blog because I bought a home a few years ago in Las Vegas, when the market was hot and now I've lost so much money on my home I can't even sell it if I want to. If I did I'd probably end up with a net loss of over $100,000. It was my first home. I put nothing down, with a 5 year arm. I have good credit, and so far have not missed any payments. However because the economy in Vegas is getting worse, I'm not sure how much longer I can afford to stay in this home. And since it's not appreciating and doesn't look like the value will be coming back anytime soon, it's looking more and more like a lost cause. I know there are many others in Las Vegas that are in the same situation that I am in, so this blog will be a good place to express your anger toward the banking system and government. I believe they both share in the majority of the blame for the foreclosures. I hear talk that the Govt. is working on it and Obama is planning on doing something, but not much action or specifics as of yet. I'm not sure the government really does have a plan. At least doesn't seem like they have any real good ideas yet. So I started this blog so Americans can post their thoughts themselves and discuss some possible solutions. The foreclosure crisis is the root of all our economic problems and what triggered the recession, so we will not only be solving the foreclosure crisis, but also saving the entire country from meltdown.

I will start things off by giving my solution to the problem. It's fairly simple. I propose a new federal law, that protects home buyers from ever losing value in their home by no fault of their own. If a home ever goes under what it was originally purchased for the mortgage company will be required to take a loss and write off the principle. At first I'm sure you are saying no way, this is wrong, and maybe even unAmerican. But what does it mean to be an American? Does it mean that we corrupt and like it that way? Does it mean that we do not look out for one another, and try to pull each other down anyway we can whether or not it's ethical or moral? It seems to me that alot of the times now a days that's exactly what it is. And we allow it to go on and turn the other cheek and just say to ourselves that's just the way it is and nothing can change it. Well not nothing. We can change it if we want to. I have put a little thought into this new law and I think it may very well be the correct solution. Let's think about it for a second. If there was a law that required a mortgage company to write down a principle if a home went under that value originally purchased, do you think maybe banks would make sure they are making good loans? Ummm absolutely. If they don't get the home value right, they will take the loss. Not the buyer. Do you think they will make sure they are not handing out risky loans? Absolutely, we all know what happens now when you have too many foreclosures. Would this create a real estate market that was fair and stable? Yes, a market that is as safe and stable as a FDIC insured savings account and a market that people would want to invest in again. One of the big problems now is that people do not trust the market anymore, and just don't want to take such a risk anymore. The law is simple and straightforward, the banks take the loss. After all they are to blame as well. They are taking the risk of whether or not you are going to pay back the loan. Now things are so bad, no one wants to pay the loan and they are risking their entire companies. Why? They're reputations are now that they cannot be trusted and now no one wants to do business with them.

Now the only problem I forsee with this law is that banks may end up dictating home prices. That's a big maybe.. I think the reason they require 20% or 10% down is just in case you pay to much for a home. So if you put 20% down and the home is worth 20% less well, the bank wouldn't take that loss. That would be on you. But if it goes beyond the 20%, then the law would state the bank would be required to write down the principle of the loan to the home value minus the 20%. This is only fair that the bank would do this. After all you've already lost everything you put down. You took that much risk. The bank should take the rest.

If anyone has any thoughts or ideas for or against proposed law, please add it to this blog.

Show 12 Reader Comments	Comments RSS
Comments are closed for this post.

Content on blogs in My.BarackObama represents the opinions of community members and in no way should be interpreted as endorsed or approved by the campaign.