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!!!GOT the HOUSING PROBLEM SOLVED!!! - Next?

This is a letter I sent President Obama this morning. I know it seems ludicrous of me to think that he or any of his staff would read it, however, I'm also the eternal optimist, and who knows, right? Here it is:
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HOUSING PROBLEM SOLVED:

Mr. President, although I did not vote for you and don’t agree with many of your basic tenants of governance, our family wants you to succeed and get out of this morass we are all in. I believe I have come up with a solution that will satisfy the majority of home owners and will solve the national dilemma. To wit:

1. Set up the U.S. Federal Reserve Bank - Real Estate Division (Not Fannie Mae or Freddy Mac)
2. People who are currently under foreclosure or about to be foreclosed or are having difficulty making their payments, can apply for a low-interest real-estate government loan (let’s say 1% to 2% for the next five years), amortized over 30, 40, even 50 years so that their monthly payment is considerably reduced. If after all this, certain people still default on the loan, then take the property back and use it to re-sell it to individuals and/or investors.
3. Allow the first six months of loan payments to be waived in order for the family to regain strength and begin to pump money back into the economy.
4. Allow people who have been diligent in making their loan payments, who are current and perhaps don't have such difficulties, also to apply for a low interest loan from the Federal Reserve Bank - Real Estate Division at the same low interest rate given to everyone else and for the same period, with the same incentives.
5. Structuring this program will not penalize those of us who have kept making our loan payments on a timely manner, on the other hand, it will revitalize our economy much quicker, more efficiently and decisively equitable. I dare say, people will certainly have more spending dollars if they don’t have the heavy burden of large interest loans and re-adjusting rates.
6. Just as importantly, I believe you should give those of us who have been diligent in making our payments, the incentive to deduct additional interest. For example; someone who has paid $10,000.00 in interest payment for a year for their home should be able to deduct $15,000.00 or even $20,000.00 from their taxes.
7. All this involves paper transactions and does not require for the government to be sending checks out. To be sure, IT IS IMMEDIATE RELIEF which is exactly what will get us out of this mess as quickly as anything else.

EFFECTS ON THE BANKING AND LENDING BUSINESS AND THE ECONOMY:

1. It is a bailout of the banking and loan businesses, no doubt about it. However, it does not mean that the government has to cut checks to them for billions of dollars of our money. Moreover, we won’t have to keep tabs on them as to how they spend it. This process will be immediate but on a one-to-one basis, which is self-regulating. Less chance for the banks and lending institutions to mismanage our moneys.
2. Significantly, it will also allow banks to continue lending moneys for new projects, new homes, remodeling, and once again begin the recovery of our Nation.
3. In doing so, legislation ought to be passed to give lending institutions the rock-bottom formula as to how to lend home loan funds. In other words, let’s get away from the sub-prime lending practices and sexy manipulated packages and go back to the tried and true ways of people qualifying and buying homes.
4. Remember, Mr. President, not everyone has the right to own a home. They have the right to work hard, save, be prudent and then have the satisfaction that they have done something for themselves. Our family did just that, Mr. President. It took my wife and me, with the help of my father and mother, fifteen years to buy our first home. We already had three children. In 2006, we paid it off.
5. Banks and lending institutions that have been diligent in their lending practices, and who are not in trouble, and are not asking for a bailout, should be rewarded with special incentives, such as 0% interest loans for a period of time. They, in turn can offer savings accounts with better interest rates than Wall Street and speculators and investment firms can.
6. The Federal Government will get its money back with interest so that it is not a gift to the people but a solid investment in the future of our country and the future of our children and grand children.
7. Any banking or lending institution and for that matter any company that has stockholders, using public money, should not be allowed to pay any dividends, large salaries, or the extra perks, until such company shows solvency and is making an annual profit. Then the distribution of dividends, salaries and perks should be commensurate with the percentage of profits reported.
8. Lower the U. S. corporate tax base, Mr. President. It is the highest in the world. Don’t penalize those companies and/or individuals who make lots of money. They work hard and deserve it. This is not a communist nation. We are a capitalistic nation and always will be. Leave the system alone. You’ll see corporations come back to the U.S. and more individuals invest in the United States once again. In doing so, the benefits will all come back to the people.
9. Leave all private companies and businesses alone. They can make as much money as they wish and pay however much they believe necessary to their executives as long as they remain “private” in every way. Leave them alone, please!
I believe that if you enact these suggestions, you will see the immediate “trickle down” effect and it may not be necessary to bail out so many businesses.

By, the way Mr. President, don’t be surprised that once this has been implemented, to see lenders/investors wanting to buy back home mortgages, knowing full well, that they now have a solid base for repayment.

Thank you for considering these suggestions.

Respectfully,

Lou Peralta