adjust some more.....

So after yesterday's post about McCain's plan, Chris commented on it and how we are still helping "bad homeowners", while not doing anything for those playing by the rules. I agree with him, but as I mentioned, I was going by what McCain's idea was, and using the cards we now have in front of us.

***BTW, while not perfect, this is at least a plan. Of course the Obama campaign was against it today, claiming it helps banks and Wall Street, and not people. How? They didn't say, but they just kept repeating it all day today. I'm no genius, and no matter what you think of the plan, but if people behind on their payments start making payments again, I think that is a good thing, and helps people, not Wall Street. I swear if McCain said the sky was blue, Obama would say no it not, all his kool-aid drinkers would all agree and claim McCain is out of touch.*** (end of rant)

Ok, so after seeing Chris' comment, and my wonderful wife applauding his remark, I saw a piece on CNN about the plan. It had two homeowners that live across the street from one another in Southern California. Both houses had decreased $200K since bought. One couple have not missed a payment, and scrimp and save each month, while the other lost his job, and had not made a payment since February. The first people did not like the idea, because it seemed to reward bad behavior (which it does), while the other liked the idea because right now his bank will not help him, but he wants to keep his house and make payments as best he can until he finds work again.

So it got me to thinking. What if instead of buying the bad loans like McCain's idea, the loans were renegotiated at a different base amount, but the difference between the new base and the existing mortgage was not forgiven, but held "off to the side", and would be repaid when the home was sold, or sooner (as interest would accrue) if the homeowner got into better financial time?

This idea came to me when it was mentioned that because these homes are in Southern California, it was very likely they would appreciate back up to their value, and the person not making payments now should not be rewarded if they do stay in the house and sell it.

Again, I know this is not the normal way of business, but this is not a normal time, and again, funds have been committed, and I would rather these funds help people than big firms. There are plenty of "what abouts" with my idea (what if values don't go up, etc.), but it is a starting point. It gets away from overly rewarding (yes, they still get a break, but much smaller) those that would normally be in foreclosure, but at the same time gets payments back into the system.

Again, under normal circumstances, I would not even bother thinking about something like this, but the number of foreclosed homes around the country is staggering. My feeling is that it is better option than empty houses in your neighborhood. So, while this is not ideal, I do think it approves on Senator McCain's base idea, and in the end would not cost as much as his original proposal.

At least it is an idea. Let me know what you think. I am sure at least one of you will. ;-)

- Our 360s will never be turned off.
- Your new season of CSI starts tonight.
- Would Governor Palin really go on SNL?

Until the next time.....