Could it work?
Dave Lynch's repair on the mortgage crisis www.DaveLynchForCongress.org
Here
is the summery of my financial fix, of course it needs details, but
the
basics are in place. This is what I suggested to Barney Frank's and
Chris
Dodd's offices over a month ago.
We used to have Usury Laws http://www.usurylaw.com/ that prevented
loan
sharking and dangerous lending practices.
As a Congressional rep I
would like to implement a similar set of
regulations...
1. All home
owners mortgage loans, in trouble or not, so long as income
can be verified,
be allowed to be refinanced at 5% (currently FED is a
1.5%)
2. The
term can be for 10, 20 or 30 years, fixed rate, no Adjustable.
Time may be
set for 6 months before window to refi at this rate closes
or changes to 5.5%
max.
3. In the event of the death of the purchaser, the home and loan
then
automatically become the property and responsibility of the
immediate
next of kin. The State is not allowed to confiscate any
personal
property. Also, there is no death tax allowed.
4. All credit
companies: Master Card, Visa, American Express, etc. can
only charge a
maximum of 10%, and may charge less to attract customers.
Good customers of
course should receive better rates for paying off
balances early.
5.
All merchant service providers, the card readers at retail stores,
can charge
no greater that 1.5%, for credit, more than
.25 cents for debit, .05 cents
per swipe max, and the equipment must be
priced at current market value, no
greater.
6. Credit companies my NOT change the interest rate on a
customer who
has signed on at a specific rate, and neither can the credit
company
change the rate on an existing purchase.
7. If a customer
misses or is otherwise delinquent on a bill, but is
current on others, the
other companies may NOT raise their rate in the
assumption there is a credit
risk, where no risk has yet been proven.
Potential negative result:
Banks/Lenders would lose money, maybe.
Positive: there would be far fewer
defaults and more loans would be
written and paid off. Banks/Lenders would
actually make more money if
more people could actual qualify and manage the
loan w/no balloon pmt..
Also, the consumer would be less likely to
default on debt, especially
if banks had to match credit to income, and the
consumer wasn't crushed
by interest or allowed access to a credit line beyond
their means.
Result: Families would not lose their homes, a neighborhood
would be
saved from blight of home abandonment, the home owner would once
again
make purchases of food, gas, clothing, supplies in local shops, and
make
the house payment / property tax payment injecting cash immediately
into
the system.
With the consumer stabilized, the small business
would have customers
and be able to employ again, completing the
loop.
Write In Dave Lynch for US Congress, District 5, Sacramento, Ca.
on
November 4th www.DaveLynchForCongress.org