Step #1: Give everyone who has a mortgage a 120 day moratorium on their mortgage payments. This would be retroactive for anyone who is currently late on their payment. This would act as a great stimulus to the economy, especially at Christmas time when people are motivated to spend money!

Step #2: Individuals apply for Gov payoff and refinance into a 30 yr. fixed rate of 3% – 4%. Applicant shows decrease or loss of income. Gov will payoff the loan, same as any home owner could do at anytime they were able, and the Gov will hold the deed to these homes so will have something if the home owner still goes into default. If a home owner is still unable afford the payment, work a Gov Subsidized loan with them and keep them in their home, same as the Gov does with Gov subsidized housing projects across the country, only difference is that the Gov will own these homes, not the developers who build Gov subsidized housing projects.

This process could be run through the mortgage lenders, and anyone associated with this process would provide a huge shot in the arm for them and should create additional jobs at the same time.

In short, if the banks don’t want to loan money to help jump start the economy, it’s time for the Gov to step in and do it for them!

charles’s last blog post: The BiggerPockets Real Estate Show tackles Madoff & Housing Bailouts

Rich Mundle – Sherwood Park Real Estate