Diary

Save mortgages not CEO's

Fixing the Housing Crisis

I. CEO pay must be reasonable.

  1. Limit CEO pay to $400,000.00
  2. File charges of embezzlement to the former CEO’s of Fannie Mae, Freddie Mac, AIG and Washington Mutual….especially Washington Mutual CEO who got a golden parachute of $19 million for only 3 weeks of work,,,, How is this possible and how is this conscionable?
  3. Use the millions recovered from the CEO’s to invest in the companies they ruined.
  4. No Golden Parachutes, no huge buyouts, no huge shares of stock options.
    a. Only allow bonuses of profit sharing from the company they work for.

II. Mortgages need to be reasonable and secure.

  1. All mortgages need to revert to 3% interest rates. This will allow many people to stay in their homes.
  2. $ 10,000.00 needs to be paid on all 1st Mortgages held by all Americans. This will allow the market to correct the over-inflated value of the Housing Industry.
  3. By giving people a rebate on their homes, it will give some equity back to the home owners. By lowering the interest rate; this will allow the home owner to make the payments.
  4. Instead of giving money to one man to oversee and one company to waist; this will reward the Banks which made good loans and reward the home owners’ who are willing to stay in their homes.
  5. The Government is going to hold the loans anyway; might as well let the money go directly to the Mortgage industry.

THIS WILL INCREASE LIQUIDITY AND HOME OWNERS CREDIT RATINGS

III. Home mortgages need to be given to credit worthy people

All FUTURE Home Loans will need to have 10% down and a true ability of the home owner to pay the FULL AMOUNT OF THE LOAN. Which will be held at 3% till 2010, then 4% in 2012 with increases the next 2 years until the interest rate is correct with the inflation and Bank lending rates. 1. This artificial hold on interest rates needs to be done so the home owners want to buy homes and can afford to buy homes. 2. No home owner should be allowed to withdraw more than 80% of the value. a. Home owners were allowed to get second mortgages and personal lines of credit with some exceeding 120% of the value of the house. This should no longer be allowed. 3. Homeowners who are about to be foreclosed upon; will be allowed to stay in their homes for the next year at ½ the amount of the mortgage payments if they can afford to do that. a. This will allow the home owner time, which may or may not give them the ability to get back in control of their finances. b. This will keep more houses off the foreclosure market and prevent them from going into ruin and people destroying the inside and outside of the house.c. Taxes, insurance and interest payments should always be rolled into an escrow account. This will make sure home owners are aware of the full cost of living in the house they are looking at. And will give Banks at least some insurance on the house loan.

V. Tax rates on Homes need to be reduced by 10%

  1. The current tax rates are inflated and need to be reduced across the board.
  2. I understand this will be hard for the local communities….and governments, but the government must tighten its belt if the people of the US must tighten theirs.
  3. More people living in their house will bring more money to the tax base. If you allow the house to go to foreclosure no one will pay the taxes.

START WITH THIS PLAN AND GIVE IT 3 MONTHS BEFORE CHANGING ANYTHING ELSE.

  1. CEO pay limited to $400,000.00
  2. Mortgage rates need to be placed at 3% for all people; currently held 1st mortgages and future mortgages.
  3. Home mortgages need to be given only to credit worthy people.
  4. Taxes on houses need to be lowered 10%.

Respectfully,

Joseph Fawaz

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