It simply amazes me that years after the housing crisis reared its ugly head that not one of the thousands of people in Washington seems to have a clue what to do about it.  Here are some of the ideas I would have implemented day one.

1) If you are currently owe more than your house is worth and you try to re-finance simply to get a lower rate, the bank will tell you that you don’t qualify for a new loan and won’t do it.  Does that make any sense at all?   Our government has been giving the banks billions of dollars and keeping rates artificially low and this is the result.  Here’s a thought: Why not make it a stipulation that if they took the government dollars they MUST reset the borrower’s interest rates if they go down?  Imagine that.. mortgage payments going down simply by virtue of taking advantage of an interest rate the government set.

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3) Make loan modification substantive.  If someone is behind on their mortgage payment AND they owe more on the property than it is worth, rework the 30 year mortgage to 50 or 60 years to make the mortgage payment affordable and get them back on their feet so that they can remain in their home.  Forget all the ludicrous red tape and make those the only qualifications.   This isn’t a giveaway, they are still on the hook for the mortgage but now they can afford it.  If I were doing it, I would also make these mortgages transferable to a new buyer.  Do you suppose their might be demand in the market for a property with a very low interest rate and mortgage payment?  Hmmm I wonder.