End cycle of waste and irresponsibility
As Timothy Geithner attempts to come up with a plan to make this stimulus work, he and his cronies need to implement effective means of accountability and encouraging lending again, rather than a repeat of previous measures that the government implemented and which resulted not just in dismal failure and waste of taxpayer dollars, but actually made the housing crisis significantly worse. Let them put in long-term plans and talk to lenders who understand the operations of the mortgage market.
First, require that Fannie and Freddie rescind the "Loan Level Price Adjustments" they implemented this year, which cause the interest rates of all but the most elite borrowers (those with credit scores over 740 and loan to values under 60 percent) to pay a higher interest rate. Qualified borrowers trying to take advantage of today's historically low rates, are being penalized, after their tax dollars were used to bail out Fannie and Freddie. Next, allow those who are paying their mortgages but have decreased property values or adjustable/higher risk loans to refinance. Third, do not allow these agencies to penalize people who own condos or 2-4 units - the price adjustments for these properties are prohibitive and will result in continuing decline of values and increased foreclosures, along with the failure of builders, developers, and banks that have financed such projects. Fourth, require financial literacy education for anyone who is being "rescued" from foreclosure; the default rate for those who have received help to date is exorbitant. Give them the tools to be successful if they are going to receive assistance. Fifth, use part of the "stimulus" funds to purchase bonds from state housing authorities, to allow them to once again promote safe, affordable, accessible homeownership for first-time buyers.
It is time we all got mad enough to make government and those receiving bailout funds listen to us rather than continue the cycle of waste, irresponsibility, and business as usual.
Kathe Doremus
Winfield