Tuesday, October 21, 2008

To stop the bleeding.....put a bandaid on it!!

I don't know if anyone else saw this article that was on the internet http://www.msnbc.msn.com/id/27311840/
but these are words that I have preaching for sometime now.
I saw first hand how the mortgage mess happened...I was there, saw it happening and saw it fall.
I think that the only way for the mortgage mess to stop bleeding is for all lenders to reduce the interest rate on every one's loans to a low fixed rate...say 4 or 5 per cent. I know that this is going to cause them to lose alot of money in interest, but it will stop the massive amounts of foreclosures across the board.
I don't think that this reduction should only be made to those borrowers in trouble, I think it should be made on ALL loans, across the board...with every one's values dropping it is too easy for alot of people to walk away from their homes, this would give everyone a more affordable payment and the incentive to stay in their homes.
When values come up again, and they will...then everyone will begin to refinance again to pull money out. Unfortunately that is the American way now, since it is the only tax deduction for most of us. Most people will never accomplish paying their mortgage off, and never really work towards that.
It always reminds me of the bumper sticker...he who dies with the most toys wins...that pretty much sums up our society, we want what everyone else has only newer, bigger and nicer. And we have all learned the last few years that all you have to do is tap into the gold mine that you live in...your home.


Twisted Fencepost said...

So true! And so sad!

Grandma J said...

I agree with the across the board lowered interest rates.
While building equity for the purpose of refinancing to access the funds isn't always a good idea. Too many people speculate on future earnings and end up in the same situation again.
What a mess!

brneyedgal967 said...

In some cases it makes more sense to rent than to buy.

We pay $1400/mo rent on our home. It's valued at $350k and has 5 acres. The landlord bought this home in foreclosure at a steal and has no plans to sell it. Which is fine for us. He gives us carte blanche to redecorate or even minor remodeling in the home and whatever we want to with the land. It works. We're not strapped with a monster mortgage and have the freedom to be debt free and pay cash for anything we want.

And when something breaks or needs repaired - he foots the bill. Not us.

brneyedgal967 said...

For clarification - I live in Oklahoma where an average 3-bedroom, 2000 sq. foot home would cost between $150-180k.

I am sure this is ridiculously cheap compared to costs in California.

I don't know how anyone can afford to live there. Please, enlighten me.