Submitted by Bryce Ellsworth, Sep 25, 2008 12:52

An Open Letter to Congress, the Chairman of Federal Reserve and the Secretary of the Treasury. It is clear that we are on the brink of the largest financial challenge our country has seen in our lifetime. So it is with the utmost concern that I write to you today. I will assume for the sake of argument that in our current state, each of you is looking out for the best interest of our country and are willing do to whatever is necessary to insure the stability of our country. It could only be true, as there is no other explanation for the willingness of all to work together on the unfathomable thought of taking on the burden of what may be $1 trillion dollars. But it is on this basis that I caution you not to be hasty. Such major decisions in the light of the pressures that surround you should not be made quickly, and should not be decided with-out further exanimation and the ability of better plans to surface. It is with this that I am hoping to help to examine the true issues at hand. Let's look at the facts: We are I in the midst of a housing crisis. It has been made based on the most perfect of storms. A lack of oversight. The want of both the public and companies to make money. The clear misunderstanding of how damaging it could be should both the people who allow credit and the people who use it to abuse it. It is Greed at that heart that allowed banks and other entities to lend money indiscriminately. It is Greed at the heart that had builders over inflate prices with credit back schemes to entice buyers. And yes, Greed that got the American consumer to buy more they could afford based on the promise that they would make money "just like the banks" with other peoples money. From the middle man broker, to the super investor to the inventor of the CDO, we have all been duped. Yet, since it was all going well, the people that would be hired to watch out for us have failed. Yes, the government and its lack of oversight and lack of enforcement of current law are also to blame. It is the perfect storm where almost all are to blame. And no one, even those of us who did think there would be a correction, could have predicted this. I am aware that the housing crisis is causing financial instability with-in companies and businesses. That the unemployment rate is going up. That people are genuinely concerned about the state of our economy as a country. But these are symptoms of the problem. The problem is still the housing market. With the price of houses falling dramatically across the country, owners of homes may think it best to walk away. Besides how can a normal person come up with $100, $200 or $300k that has been lost on their home? This is many times enough to get them to walk away alone. But then with mortgage rates going up, the payment makes no sense on this asset that is depreciating. More and more owners default and walk away. The inventory goes up, more signs go up, and more people think this to be the normal action to take. Just walk away. Banks and investment companies look at the value of there collateral continually depreciating. They lend less money, the sell of losses at steep losses. It is the spiral that has no end in site. But today, on the day you debate what action to take, you can stop the bleeding. You have the ability to fix the problem. So stop, please, looking at the symptoms and address the problem. The first rule in pricing is supply and demand. The second is want and need. The third is intrinsic value. Today you say that the banks will stop lending money if you do not act by taking over their bad decisions and bail them out to the tune of $700,000,000,000. HOGWASH! Banks and companies will always do things that make them money. It's time to make it simple. Here is an alternative plan that works. 1. Starting October 1, 2008 all foreclosures are halted (frozen in place for 45 days). This stops the increase in inventory. 2. Home Loans (residential primary residence loans) in default 30 days late or more will be allowed to be sold to the government at 50% of the amount of the loss. In other words. If a $100,000 is now in default, and the rate of decrease in value since the loan was made is $30,000, the bank would sell the loan to the government at $85,000. Splitting the loss. All loans in default will be eligible if one is eligible for relief from any company. 3. The government would then allow the homeowner to replace there mortgage based on the 50% loss agreement at 4.5% for 30 years. 4. Banks that did not agree to this type of arrangements would be on their own. 5. For any mortgage related investment held by any company that goes bankrupt that does not allow for these arrangements to be use on all there loans in default, their asset's would be immediately given over to the government in their current state at no cost to the United States. This can be done by the passage of law by congress. A 5 year horizon is ideal 6. Homeowners for their primary residence would receive the following incentives to stay in there homes. For all homeowners living in their home on December 31, 2008 they would receive a cash stimulus of 1% of their mortgage value. At the end of 2009 for all homeowners living in their primary residence on December 31, 2009 they would receive a stimulus of .5% of there mortgage as a cash stimulus. 7. All participating banks would agree to modify all adjustable rate loans for primary residence borrowers to 30 year fixed loans at the homeowners current rate. 8. Banks that cooperated in the government buy back of loans would receive a tax break of 150% of their loss on each loan that is sold to the government. 9. Investors who are in default on their homes would be allowed the same benefit as in the primary residence buyback plan would be allowed a similar benefit, but at a 5.75% interest rate with a loss split of 40% bank 60% investor. Laws such as rent skimming and loan fraud for investors would be strictly enforced 10. All builders involved in illegal price inflation. This would be based on a total credit of more then 6% to any one buyer for any cost would be fined double the amount of the price inflation. 11. All fines from builders, fines from banks and individuals would be remitted to the same entity that oversees this mortgage entity. 12. Banks in a second loan position would also receive financial incentives of $5000 in cash rebates for every home sold as a "short sale" that closes between now and December 31, 2009. Shared responsibility. It's time. All of the items in this type of plan would allow a healing of our troubled housing market. A huge decrease in inventory. Stability to the troubled homeowners, shared losses with banks, incentive's for investors to hold property for the long haul. And yes stability in the housing market, price increases and a freer flow of money for financing. Yet there is no 1 entity bailout, where the tax payers and the government alone are stuck holding the bag. We must now step away from the ideas that are out there and step into a solution. Sincerely, A Common Man This letter is to be printed in its entirety. You may fix any grammar but not change content. Below is a brief resume, and you may use my name if needed or contact me with questions. The main purpose if to assist our country with a real solution. Bryce Ellsworth- 925-642-7653 Real Estate Broker, Owner of a Real Estate Brokerage and Mortgage Company Proclaimed an expert witness in real estate by the U.S. Bankruptcy Court Used as an expert source (quoted) for various articles by the Contra Costa Times, San Jose Mercury News and the Tri Valley Herald. Interviewed as an expert in real estate by Fox Channel 2 News SF bay area. Personally sold 100's of properties locally and have received countless sales and achievement awards.

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