Something more out-of-the-box is required. Something that everyone can grasp. Something that would rally the nation.
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Los Altos, CA (PRWEB) March 16, 2009
Today, Clean Slate Homes began organizing grass root efforts to present a case to the Administration and Congress to slash all home mortgage rates to 2%
"Clean Slate Homes is a company that helps distressed homeowners and has more experience negotiating with lending institutions and investors than should be necessary," says founder Corinne Wayshak.
As late last December 1, 2008, Bernanke declared he was "mistaken early on in saying that the subprime crisis would be contained. The causal relationship between the housing problem and the broad financial system was very complex and difficult to predict," he said.
Yesterday in a taped interview on CBS Corp.'s "60 Minutes" program, Bernanke updated his opinion to "the biggest risk to an economic recovery is a shortage of 'political will' and banks must find a way to make loans to creditworthy borrowers." "No time like the present to step up to the plate," states Wayshak.
On March 9th, 2009, the Mortgage Bankers Association announced mortgage delinquencies reached 11% nationwide. To be clear, this number is not the 48% of sub-prime and prime ARM loans, which include Alt-A and pay-option Arm's, 48% of which are delinquent nationwide. 11% represents the approximate 44 million mortgages in the US today, as derived from an earlier release from the Mortgage Bankers Association on September 5th, 2008.
The Conference Board's survey of consumer confidence for February "reflect the growing wave of pessimism that could keep thwart the government's plans to recharge growth and keep the economy on pace for an economic depression."
As Frank Rich and others note, "the public is pissed." Stephen Keese, a partner at Clean Slate Homes, warns, "If some banks are struggling now, they are certainly not prepared for the onslaught of responsible homeowners in an exponentially growing grass-roots effort for a moratorium on payments of current mortgages."
Wayshak claimes, "Something more out-of-the-box is required. Something that everyone can grasp. Something that would rally the nation."
The average mortgage rates across the country right now are 5%, average payments, $1900. Clean Slate today formally writes to the Administration and Congress to take the following three actions:
One: Cut all current mortgages to 2%.
The banks restore value to at least 11% of current paper that is becoming worthless according to the Mortgage Bankers Association. Value would be restored to paper that is already worthless and whose value has no valid calculation. It restores to insolvent banks mark-to-market valuation on the capital they need. Keese explains, "The loss to lenders of 2.5% or so in mortgage interest will be swamped by restored asset values."
Households would have an average monthly influx of $1,140 through the mortgage reduction. "That's a stimulus package that would go far to increase household's minimizing purchasing of basic food and shelter to more "luxurious" items as clothes, cars, and many of the other GNP items whose sales have come to a virtual halt. Recovery becomes a personal, tangible effort," asserts Wayshak
Two: Offer all new mortgages at 2%, allowing return of home ownership to those who can truly afford a 2% mortgage payment.
As the Wall Street Journal reported, "The Center for Responsible Lending, a nonprofit research group, estimates that a home's value is reduced by about 1% for every home that is foreclosed on or sits vacant in the neighborhood." Allowing homeowners to return to their properties if they can pay 2% mortgages will restore neighborhoods and help reverse the free fall of home prices.
Three: Take no prisoners.
To give teeth to the mandate, Wayshak demands, "Lenders should be given 60 days to handle the paperwork and any that refuse should have their deeds of trusts canceled with no recourse and should be denied any bailout funds." Even Bernanke said, "It's absolutely unfair that taxpayer dollars are going to prop up (companies) that made these terrible bets," companies whose management has not changed. No lender should be given a free ride on the recovery effort.
A stabilized residential real estate market will provide confidence within a very large segment of our economy that there is light at the end of the tunnel.
About Clean Slate Homes, LLC
Clean Slate Homes helps distressed homeowners and has more experience negotiating with lending institutions and investors than should be necessary. Clean Slate was founded by Silicon Valley entrepreneurs with degrees from MIT and Harvard.