I have a simple solution to the American mortgage crisis. Trouble is I’m afraid it’s so simple that I must be overlooking something or surely the government would have come up with it by now.
So tell me what’s wrong with this idea:
The government should empower one of its agencies to buy up mortgages when the mortgage holders founder. Simply pay off the lender and give the homeowner a new mortgage at an affordable rate.
That would save the homeowners from losing their homes and create a new revenue stream for the government. The loans would be backed by real estate, which cannot fail to rebound in value. And the lenders would be protected from disastrous defaults.
There must be a hole somewhere but I can’t think of one. Otherwise, I am sure our wise leaders would have implemented such a plan by now. If you can see the flaw in my reasoning, please let me know.