It’s predicated on the following:
* I think that the people who are in mortgages that they could never afford should get out of those mortgages as rapidly as possible. That way they can begin to live within their means. The longer you pay on an unsustainable debt, the worse off you are.
* I think that the banks who assumed those debts, and the tower of cards of “derivatives” that they built afterwards should be left holding the bag. The reason this continues to suck is that they’re still playing musical chairs. There is about half a trillion dollars worth of “chair” still missing from the economy, and I want to simply stop the music and make the banks sit down. Evidence shows that the fed will bail them out of this anyway, I just want it done.
So, here’s my proposal:
For the next six months, anyone who wants to default on their mortgage does so absolutely without penalty, fee, or credit rating hit whatsoever. The vicious moralists among you should love this: They lose the property (give it to the bank). Yes! They couldn’t afford it, so they lost. Morons! Suckers! Go ahead and gloat, Republicans, because these chumps are out of those houses they could never afford.
However, I want to show a bit of mercy here because those folks never should have been able to qualify for that loan in the first place. So: They lose the property, have to leave, move into an apartment they can afford. We don’t allow the banks and foreclosure mills to profit from this. That’s the part that the government should be covering.
This is radically different than the current set of plans, in which we give these folks a couple of hundred bucks, and they keep giving it (unsustainably) to the banks. The sooner these loser mortgages are on the books as “lost,” the sooner we’ll be able to re-value our economy. The banks will own a whole bunch of property and will suddenly have a vested interest in pushing property values back up.
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