The Chenkin Mortgage Crisis Solution

As of this writing, over 10 million Americans own homes which are mortgaged for more than their appraised value; They are at risk of losing their homes and (with impaired credit, etc.) may be “out on the street” or worse (Living in tents).

The banks, who foreclose and sell on these properties, frequently take 50% of the value of the mortgage as a “Short Sale” price. This is because the property either is vacant, likely in disrepair, or the former owners need to be evicted, or worse. These houses are a blight on our neighborhoods, attracting vandals, vagrants, and crime. The speculators who buy forclosed houses frequently rent them out or hold them, sometimes vacant, until the market improves, not adding a lot of value to the community.

These discounted homes reduce the comparable values of the other homes in the neighborhood, and force homeowners who are not in foreclosure to accept less for their homes, or wait until the market “recovers”. With Sub-prime loans adjusting through 2010, There will be plenty more “at-risk” homes added to the market for the next two and a half years.

Government Bail-outs, like the Bear Stearns event, DO NOT HELP THE HOMEOWNERS IN TROUBLE. They are a financial means to keep the banks afloat, usually with Federal guarrantees.

Here is my solution, and reasoning:

1. Have the banks “write-down”, or discount the at-risk mortgages to 50% of their face value – before a Short-Sale or foreclosure. The banks created the artificial runup in home values, with relaxed rules, predatory lending, loosely regulated mortgage brokers, and restrictive mortgage terms. At 50% of the mortgage value, Most homeowners can keep their property, Make mortgage, Tax, and Insurance payments, and maintain the integrity of the family and neighborhood. Remember, a short sale may only give the bank 50% of the mortgage anyway, and take many months, paperwork, and angst.

2. Have specific rules in place to prevent homeowners and the banks using the plan for unjust enrichment or speculation; This is not intended to be a solution for over-leveraged investors with many properties in foreclosure.

3. Put more programs in place for Jobs, Economic development, and community development. People with reduced mortgages can be required to do specific community service, depending on their situation.

4. Require life insurance (not mortgage insurance or PMI) for the borrowers, to pay off the debt and free the property for the children/heirs of the borrowers.

This is a proposal to get the mortgages Performing again, keep people in their homes, and preserve community values. If you agree, Please pass this on to your elected officials and friends, and urge them to help your neighbors stay your neighbors, to preserve your property values.

Energy Independence for America

The following is my opinion, and if you agree, feel free to bookmark or pass this on.

Gasoline dropped .25 cents a gallon in the past 2 weeks, and it seems it is the “thank you” from the oil companies to congress and President Bush for allowing them to drill offshore. Trump and Kennedy stopped the wind farms off their prospective turfs (Jones Beach state park in NY, and Hyannisport, MA), but seem oddly quiet about the prospect of big oil rigs in the distance. Perhaps they are too far South (Florida, Texas, etc) for them to care.
While Wall Street is rallying, I must confess my distrust of this action – The oil companies sell Alaskan oil to Japan, and our offshore oil will most likely have a similar fate – although China and India seem to be the likely customers.
The real solution is clear – We MUST stop importing $700 BILLION dollars worth of oil into this country every year. Fellow Americans, the oil supply is going to be USED UP. Our dollars are not helping American industry, but oil Sheiks and corporations who are using part of their profit to finance terrorism and religious extremists. ENERGY INDEPENDENCE, using Solar, Wind, Tidal, and Geothermal technology to replace oil is an idea that has come. This winter the average home will use $4,000 to $10,000 worth of energy, oil/gas/or coal. We need, as a people, to start using conservation and alternative fuels immediately.
After the November Presidential election, when the Oil lobby continues its shameless pursuit of unfair advantage (Oil company subsidies, tax advantages, etc.) we should be prepared and un-surprised when oil continues to hit new highs.
I urge you, and your friends, family, and colleagues, to push, write, endorse, and shout to our elected officials that OUR needs HAVE to be met; The VOTORS and all the people of this country need relief in the form of an ENERGY POLICY FOR SELF SUFFICIENCY.
WE ARE 50 YEARS BEHIND IN BATTERY TECHNOLOGY. We are years behind in Solar and Wind technology. Our Nuclear technology is old and needs rethinking, and the political and technical hurdles must be overcome for these tools to be updated and brought to the forefront of our thinking.
Enough grandstanding for the Oil companies, they got their offshore drilling, “what’s in it for us”?

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Alan Chenkin has a Master’s Degree in Public Administration, and a Bachelor’s in Political Science. His thesis was published in 1979 on “Solar Energy and the Federal Government”. He is an expert in document imaging and workflow technologies, and is concerned about the current state of our economy with regards to Energy, Jobs, and the lack of responsibility in Government and Corporate America.