May 16, 2011
Mortgage Crisis My Mad solution
Hi All, I have a very ‘out there’ idea that will be welcomed by a lot of people and not by others but something has to be done for people and also to increase peoples spending power. The situtation we find ourselves in requires urgent creative solutions and a bit of vision.
My idea is and of course it needs to be tweeked:-
1. All mortgaged houses (especially family ones) to be re-valued as at 2011 value, a date for valuation to be picked, for example this year 1st August 2011 , a group of Estate Agents to be given the job by the government to value all houses in all areas.
2. People will get a valuation cert from the Estate Agent or government appointed agency for this.
3. This valualtion cert to be given to the bank the people have their mortgage with and that is the amount they will have to pay going foward, i.e. the current market value.
4. What this will do will give a once off debt forgiveness to a lot of people having their houses re-valued and to those who dont need complete debt forgiveness it will free up the rest of their money, thus increasing spending in the economy.
For example if I bought my house in 2006 and it was 300,000 and now worth 175,000 I pay back a mortgage only on the 175,000 on todays valuation leaving the rest of my salary free.
The banks will still get their money just not as much and those who are struggling will get a break while still paying back the true value of their homes in todays value. The knock on effect is people will spend more as they will have more disposable income.
This is a once off solution and I’m sure theres loads of reasons it cant be done, but for once why cant we be creative, pro-active and stop dragging our feet in the sand. To those who say debt forgiveness is unfair – what would you rather see, more people throw themselves off cliffs etc just because you didnt want to do something really decent and good to get this economy out of the mess its in, the only people to get us out of this mess is us, lets have a bit of courage and goodwill, we can do this.