15. Foreclosure Moratorium

Foreclosure Moratorium, Mortgage Refinancing and Principal 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 “principal 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 principal 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 an unworthy steward of the American dream of home ownership.

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Showing 9 reactions

Jeffrey McCollim commented 2012-02-20 20:48:59 -0500 · Flag
Mr. Lockette, I firmly believe that you are correct in regards to issues #2,4 and 17; but I firmly believe that health care (single payer plan), criminal indictments in banking reform, and foreclosures and home equity losses must be addressed in our original petition. I would hope all and any solutions be registered and voted in this summer’s convention, especially in these three areas. The latter 2 are the causes of this Great Recession and our current health care system is unsustainable and the quicker it is solved, the better for all.
Ace Annese commented 2012-02-20 20:24:47 -0500 · Flag
Change the title; “principal” is spelled incorrectly.
John Lockette commented 2012-02-19 21:32:57 -0500 · Flag
@ chuck gregory – I disagree that the signers of the Declaration of Independence were merely stating what was unacceptable and they did not propose or state any solutions. In fact, they advanced two major solutions – elevating the colonies to the level of free and independent states and dissolving all ties to the British monarchy. At the same time, however, I agree with your sentiment that getting too specific in advancing too many solutions could create roadblocks in terms of gaining support for the cause.

Therefore, I suggest that we should stick to two or three paramount issues. I would argue that eliminating the influence of money in politics, instituting terms limits, and reforming some of our election practices are the bare minimum. All the other areas can be fixed if we the 99% can regain control of our democracy and our government through the enactment of new rules in those three areas. Essentially, that means going with #’s 2, 4, and 17.
chuck gregory commented 2012-02-19 06:39:42 -0500 · Flag
There are a few themes that underlie all of the proposed reforms at this site. It would be more effectively presented to the public if the Declaration of the 99 focused on those themes rather than solutions.

When the revolutionaries drafted the Declaration of Independence, they did not propose specific solutions; using a radical philosophical framework, they stated what was unacceptable . If they had demanded a federal system of government, the United States would never have happened; they would have been abandoned by the public as they sank into a quagmire of quibbling over details. While the goal is admirable, to propose solutions instead of defining the problem (as the Declaration of Independence did) is to undercut the purpose of the movement. They

If you want people to rally to your side, do as was done in the Declaration of Independence and clearly state the problem rather than offer the solution. Solutions are much better after people deal first with defining the problem.
chuck gregory followed this page 2012-02-19 06:39:39 -0500
robert burns commented 2012-02-17 23:17:30 -0500 · Flag
Over 4 million foreclosures, regular family’s losing there nest, safety net, community,future retirement, and broken hearts. Romney say;‘s so what, get a apartment, we’ll rent your home, just move on. This is no man, he’s the 1 % who makes millions on such deals..
Jeffrey McCollim commented 2012-02-17 20:38:24 -0500 · Flag
Article#1.“The Foreclosure Crisis: A Nation In Denial” by Bruce Judson; Huff-Post-1/9/12
Article#2. Reuters-“Foreclosure From Old Mortgages ‘Most Egregious Manifestation’ Of Broken Housing Market”; also Huff-Post 1/26/12

Article#1 states how Bernanke, in an unsolicited memo, tells congress of $7T in lost home equity . In 2006, total mortgage value of all U.S. housing was $11.2T. Add 20% for houses with paid off mortgages(guesstimate), equals $14T. That’s 50% of home equity values are GONE. Homeowners who are current with payments, as well as those who are paid off, deserve loan modifications or restitution.
Article#2 displays wrongful foreclosures. Even though Sweetheart Deal says these homeowners have legal recourse, how could they afford a lawsuit after losing after losing all their equity. As far as class action lawsuit, (from Sweetheart Deal), is gov’t going to direct these people to others who been wrongfully foreclosed.
Maria Cadwallader commented 2012-02-17 19:48:19 -0500 · Flag
I support this proposal and hope we will work hard to make it a reality. Nebraska has been hit far less by this crisis than many areas of the country, and my husband and I are lucky enough not to have been hit by it at all, but that is a result of sheer luck — we can’t claim to have planned for it.
robert burns commented 2012-02-17 19:01:15 -0500 · Flag

put me on the list. I,ve own this home since 2006 and never missed a payment, to refinnce will basically be the same payment i have now, and they refuse to do it , subject to approval. What approval, I been paying too much for over 5 years??? The sbags, I want action as quick as I can get it.
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