A Simple Fix For the Mortgage Crisis.

I think sometimes government and big business tend to forget the K.I.S.S. principle when faced with a crisis. (The K.I.S.S. principle being, keep it simple stupid.) With banks facing record foreclosures and losses on bad mortgages and home owner's losing their homes because they are unable to pay the mortgages when their monthly payments go up, due to interest rate adjustments, it's clear that something needs to be done. Obviously no one wants to lose their home and the banks and mortgage companies don't want to lose money. Clearly this problem is too big for a government bailout and it's unthinkable to ask taxpayers to pay more in taxes for such a bailout. So what would the simple answer be?

I think it would be a good idea for the banks and mortgage companies to re-write the loans instead of foreclosing and give the struggling homeowners a fixed rate mortgage. From what I've heard in the news, they all seem hesitant to do so because it would cost shareholders some profits. Well as one of those shareholders who have lost a great deal of money already, due to poor business practices and lack of corrective action, I personally would like to see them get off their duffs and start earning their fat incentive packages for a change. Inaction is the real problem here. Nothing has ever been accomplished by a lot of hang wringing and moaning. I'd rather see the return on an investment drop than to see my shares become worthless because nobody was willing to give an inch. If the deal they made on the mortgage is unsustainable, then they need to make a new deal. One that the homeowner can afford to pay. Why would you want to stick to a payment or an interest rate when it becomes obvious that it is beyond the ability of the majority of mortgage holders to pay? There is absolutely nothing to be gained and a whole lot to lose.

So, in my opinion, it would be to every one's benefit, as well as the benefit of the economy overall, to start re-writing these mortgages and extending terms and reducing and giving fixed interest rates and get rid of the adjustable rate mortgages all together.