Did you know? How will it effect our future?

Did you know? How will it effect our future?
Congress passed a loan bill taking over/bailing mortgage loans? That put us officially 3 trillion in debt. And thus taking over about 90% of home loans.
Congress passed a bill making the government the only source for student loans.
That is two freedoms of choice gone in one day.
How will it effect our future?

First, I am not a socialist. Normally.

Second, I think that I have a plan that would resolve the mortgage and credit crises and leave everyone a winner.

1. Government buys up bad mortgate debt (already happening).
2. Government buys up good mortgate debt at the borrower’s option (if they want to participtate in this plan I have).
3. Government turns over to everyone a title, free and clear, of their home property.
4. Government imposes a tax of 50% of the typical mortgage payment the borrower had. This tax lasts until the principal (not principal + interest) is paid off. Note: for folks who were on floating interest rate loans, we’d pinpoint the standard payment before things went crazy, then make them pay 50% of that.

Why this all works. A typical mortgage is 30 years and you end up paying about 3 times the price of your home, if you count the interest. If you could pay 50% of your monthly payment over 20 years, you’d cover the principal portion of your loan and still have plenty of cash left over to reduce other debt or to make new purchases.

Think about it. Say your mortage payment is $ 2,000 per month and finances are real tight (you might have credit card debt too). If someone handed you your title and you took on a 20 year tax commitment of paying $ 1,000 per month, then not only would you have equity, but if you stayed in your home you would have the other $ 1,000 you used to pay in your mortgate freed up for other things.

Is this socialist? Yep, a little bit, but perhaps a necessary move, a one-time event, to clean this mess up.

If you hear either candidate propose something like this, you heard it from Mr. Freedom first.

Think this might work? Thoughts?
Matthew, I think this plan would kick the nation’s economy into high gear and more than pay for itself over time. While I understand your point about folks being fiscally responsible, I do think that once in awhile, we need to “stand all the pieces on the chessboard back up.”
No, I think a clause is that if you sell your house, proceeds must satisfy your personal tax debt first. So you might walk away owning nothing and owing nothing.

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