ONE TRILLION USD = 5 MILLION $200,000 homes paid for in cash.

[ddeclue]

As long as the Federal government is going to go and borrow another TRILLION dollars from international lenders it occurs to me that the cheapest way to resolve the "banking" or "mortgage" crisis is simply to simply have the gov't step in and directly pay off the outstanding principal on the 5 million worst off home owners and in turn make these home owners pay this back as best they can with really long term low rate mortgages directly from the Federal gov't.

Given the eventual interest payments that would be paid to these private bankers, doing it my way would actually result in a significant long term positive for the Federal deficit. Interest on a 30 year loan is usually several times the actual principal borrowed.

It seems all we are getting for the "TARP" is a bunch of banks continuing to waste money buying each other out and handing out bonuses instead of resolving the bad loan situation.

Doug D.

[stopbush]

1. Except you'd be hard presssed to find a house for $200,000

at least in any state worth living in.

[ddeclue]

3. Well I am talking about outstanding principal on the loan

not current or recent market values. I'm assuming that this will be less and that on average it would work out. I live in FL and houses are very expensive here but CA is much worse. On the other hand rural AL is probably a lot cheaper.

[stopbush]

10. Depends if that principal now includes a home equity loan.

[ret5hd]

4. Yes. Only California is worth living in.

[stopbush]

11. I've lived in OH, NY, NJ, AZ, NV and CA, and I prefer CA.

[Autumn Colors]

6. Excuse me, but my house in Connecticut cost $200,000 in 2007

I live in the Litchfield Hills area of Connecticut, which is a beautiful area of a blue state so all I can say is a big F.U. to you.

Of course, I won't qualify for any of the mortgage help being bandied about because I bought my house in 2007 and not 2008 and I dug my heels in and would accept nothing but a 30-year fixed rate mortgage. I put 10% down.

I'm self-employed and my business has slowed drastically. On top of that, my property taxes have gone up so much that my mortgage payment is going up by almost $200 PER MONTH (because of the escrow for taxes and homeowners insurance - no change in interest and principal, of course). Due to all of that, I'm just barely making my mortgage payments now and had to cancel my health insurance because I now can't afford it and keep a roof over my head.

Just a rant after you dissed a lot of parts of my state, which are a bit more affordable than Southwestern Fairfield County (where all the stars and NYC CEOs live).

[4lbs]

2. Several things.

The TARP money isn't a free giveaway to the banks, never to come back.

In fact it is used to buy stock in the banks. So far, at least $371 million has been paid back by Wells Fargo alone, from dividends of stock purchased by TARP.

As the economy improves, the monies paid back will increase at a faster rate.

President Obama and his people have already announced a plan to use a significant portion of the second part of TARP to help 9 million troubled homeowners stay in their homes.

[ddeclue]

5. Stock isn't a tangible item. Real estate is.

The fact that the stock market has declined 50% from it's peak in the last few years and is now around 1997 levels and continues to fall does NOT make me think the government buying into the stock market is wise at all and it ONLY benefits stock holders and executives in these corporate entities as opposed to providing a basic human need - housing.

Doug D.

[uponit7771]

7. Down side is government would be home owners in defualt but upside is better IMHO. House prices have

...come down though, reading the history of Japans bubble it'd be better if we let the prices fall and home owners then can refi at lower rates and lower principles while the government takes up the slack on what's left over

[ddeclue]

12. What's so bad about the government owning homes?

:shrug:

The gov't could be very lenient to avoid the "default" situation and in any event the gov't has to provide low income housing to the poor anyways. What's wrong with having additional housing units available for that purpose.

Doug D.

[BuyingThyme]

8. That's a lot of fucking houses.

I wish I could have one.

[cottonseed]

9. I think the money is going into unwinding that $50 trillion in credit default swaps.

These bankers made a mess of the whole system, they're trying to save the system, not home owners and not the American economy.

I'm not saying it's right, I'm just saying that when nothing anyone is doing makes sense, it's probably because they're not working on what we think they are.

[ddeclue]

13. If THAT is the objective, it's like trying to save the Titanic with a water bucket.

1 trillion is 2% of that number. Not even a noticable dent could be made.