Submitted by Jeffre Powell, Certified Mortgage Planner, Nov 11, 2007 11:00

I found this article balanced. The author just reported the information and allowed the reader to come to his or her own conclusion. I like that. We see far less of that as the years go by.

There is a pretty simple solution to the problem of foreclosures facing the country today. I would like to offer it, just in case some one who has the "juice" to do something about it chooses to. Who ever that may be is certainly already wealthy beyond my imagination. The solution will certainly increase his or her wealth that much more.

First you need to verify this fact. Sub-prime borrowers performance tracks "A paper" performance step for step prior to the adjusting of their rates. Both, only foreclose about 1%. When they do (save for the reasons of the adjustment) they foreclose for the same reasons. The significant reason that sub-prime borrowers are now foreclosing in great numbers is only because their interest rates are raising from 5% to 7% in just one adjustemnt. Very often their monly mortgage payments are doubling.

Many folk do not understand that they make their payments to servicers. Those companys are paid to service mortgages mortgages originated by other lenders. But, they do not own their loan. They are not the lender and thus have only limited ability to make adjustments. In most cases they are not authorized to do what would easily solve the problem. In most cases they do not have the authority to truncate or eliminate the adjustment and thereby leave the payment in reach of the mortgagee's budget.

Most or all loans that are guaranteed by Fannie Mae, Freddie Mac, FHA and or VA are sold as "mortage backed securities" (bonds). All or most others are sold as "asset backed securities" (bonds). Because loans are sold as bonds and thereby are broken up in peices and spead across the world no one has the ability/authority to instruct the servicers to stop adjusting the rates. Because of that, investors who own "mortgage asset backed securities" will eventually loose their investment with regard to those investments.

Here is the solution that could change the dynamics very quickley.

Form a cartel to purchase those mortage asset backed security bonds. Offer to puchase them for 20cent on the dollar or less. :Put humpty dumbty back together again and thus gain the authority to to instruct the servicers not to inforce the provisions of the contract that incurrage the foreclosures. The foreclosure rate will drop back down to 1% and as a result the those mortgage asset backed securities value will increase 10 fold.

It is a win win for most. Problems have solutions. They allways do. So lets not focus on the problem it never helps.

If you have any questions, feel free to contact me at 410-740-4540 or email me at bestjobdone@gmail.com.

Jeffre Powell, Certified Mortgage Planner

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