Private Investor Solves Housing Crisis
The Bottom-Up Family Housing Voucher (FHV) is a micro loan concept that creates credit and value through leverage to stabilize real estate markets, thereby altering prevalent toxic paper held by institutions into assets with value.
Los Angeles, CA (Vocus/PRWEB ) May 8, 2009 -- The Bottom-Up Family Housing Voucher (FHV) is a micro loan concept that creates credit and value through leverage to stabilize real estate markets, thereby altering prevalent toxic paper held by institutions into assets with value.
The FHV, by Jud Ireland, is now gaining traction. FHV will be backed with the full and complete credit worthiness of the United States Treasury.
"This is the best plan I've seen to help the housing crisis. It's so brilliant in its simplicity, no wonder everybody missed it. Now is the time to implement Family Housing Vouchers." -- Michael Intriligator, Professor of Economics, Political Science and Public Policy, UCLA and Senior Fellow Milken Institute
The FHV is a divisible voucher with a duration of ten years. The government will issue Family Housing Vouchers (FHV) to homeowners as a loan to pay off a portion of their mortgages. The issuance of FHV is to create confidence and signal an end to the housing crisis. The US Government can adjust the distribution depending on how much inflation the FHV may create. The immediate cost to the government with a 1% coupon rate is ten billion dollars for 1 trillion in added liquidity.
Financial institutions will keep the FHV on their books with the same capital requirements as Treasuries or Agency assets which will stabilize their balance sheets accordingly. Banks will loan against them with a multiple of value, further aiding the economy.
The financials can slowly monetize them by liquidating / redeeming them back to the government at the rate of ten percent per year.
Stability of the housing market is the goal.
"The Bottom-Up Family Housing Vouchers plan is the natural ally for homeowners, housing bond holders, Wall Street, and Washington. This is the only plan that helps everyone." -- Jud Ireland
Discussion Points:
| | - Wiki estimates the USA has $10 trillion in existing mortgages, some economists estimate as high as $14 trillion.
- The government cost for 1 trillion dollars of FHV is only 10 billion dollars a year and will certainly signal an end to the housing melt down.
- What happens to homeowners who have no mortgages? They get a tax credit.
- FHV is a micro loan based on macro Keynesian economics*.
- The homeowner repays the loan voucher to the Government.
- Who gets an FHV? Some balanced distribution.
- An FHV secondary market will not be allowed as that would defeat the purpose.
- "Bondholders love FHV because they create value for the bond holders instead of a cram down from the government." -- Jud Ireland
- Wall Street likes FHV because they mitigate the risk in buying "toxic assets."
- FHV complement the Geithner Plan by turning toxic assets into valuable assets.
- FHV might be administered using the existing Tax Roll.
- The Bottom-Up Voucher solution can also apply to small business owners, cities, universities, or states.
- The Bottom-Up Voucher solution will create millions of jobs.
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*Keynesian economics is a macroeconomic theory based on the ideas of John Maynard Keynes that contends that private sector choices sometimes lead to inefficient macroeconomic outcomes and therefore advocates active policy responses by the public sector which would include monetary policy actions by the central bank and fiscal policy actions by the government to stabilize output over the business cycle.
To view the complete biography on Jud Ireland or Michael D. Intriligator, please click on the appropriate link below:
Professor Michael D. Intriligator Biography
Jud Ireland Biography
For all media inquiries, please contact:
Virginia Lawrence
Ballantines PR
Virginia (at) Ballantinespr (dot) com
818 577 6698
http://www.ballantinespr.com
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