A simple fix for the mortgage crisis

By Michael Fraase

Thursday, 03 April 2008 08:33PM CST

Section: Business

Housing slumpAnyone who thinks the US mortgage crisis has hit bottom is dreaming. Bad mortgages are going to continue to reset for years. Congress is contemplating overly-complicated solutions that benefit mostly the wrong people, while President Bush has ducked out and is relying on his experts. Both Congress and the Bush administration have self-serving agendas on this issue.

Here’s a simple fix without an agenda:

  1. Congress immediately passes federal legislation that (a) returns foreclosed properties to mortgage originators; and (b) precludes mortgage originators from refusing to take title on foreclosed properties.
  2. The states and/or local municipalities simultaneously pass legislation that raises the property taxes on foreclosed properties to 100% of the appraised value that the mortgage originator arranged.

You think that won’t light a fire under the asses of mortgage originators to negotiate a fair workout for those in trouble with their mortgages, allowing them to stay in their homes?

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