Noted economist and independent candidate for Florida governor Farid Khavari called for all Americans to withhold their mortgage payments to apply pressure to banks. "And, as governor, I will sue every bank that forecloses on anyone with bogus documents. If they do it more than once, we will do our best to bar them from doing business in Florida.
"Foreclosures are rampant and there is no end in sight as long as unemployment is high. And there is no reason to expect unemployment to do anything but get worse," said Khavari. "My economic plan for Florida will generate a million jobs in three years, but foreclosures will continue to rise unless we do something now.
"The banks brought us the housing bubble. They drove up home prices and wrote millions of stupid loans. Then they bet on the loans failing, using credit default swaps and collateralized debt obligations.
They won the bets and collected their money, so why are they crying? Meanwhile, they have raised interest rates, cut credit lines, and lowered almost everyone's credit rating, including the majority of people who never missed a payment," Khavari said. "This has brought our economy to a standstill.
"Until we clear up the foreclosure crisis, the economy can't move forward. And the banks are doing nothing but making it worse. They collect on their bets, then grab the homes and put families in the street using bogus documents. Then they sit on the houses because they don't want to admit they are worth less than their books show.
"Every family in America lost out, but we bailed out the biggest insurance company and the biggest banks in America, and their employees collected billions in bonuses. And what have they done since but destroy our economy? The banks need a wake-up call, like a two-by-four upside their heads," Khavari said.
"They screwed up their own system so badly they need to forge documents to do foreclosures. Anyone who believes that their recent reviews of their documents will change anything should shop for beachfront land in Arizona.
"If every American family would withhold their mortgage payments, and save that money in a bank other than where they have their mortgage, we could get the banks back to come clean, or else get rid of them forever. Specifically, we must withhold payments until every bank does the following:
"First, issue a statement showing their total mortgage activity since 2006, and a summary of all the derivatives they speculated in, all the collateralized debt obligations and credit default swaps.
"Second, every homeowner must be informed of what the bank did with their mortgage, including packaging it, slicing and dicing it into so-called securities--and exactly how many derivative bets the bank made on that very mortgage. We'll see how much the banks stand to collect--and from whom-- when you don't pay the mortgage.
"Third, every homeowner must be informed exactly where their original mortgage note is, who owns it now, and how they can see it if they wish to.
"Fourth, the bank must negotiate in good faith to reduce the principle balance according to the new market reality, which was brought about by the banks in the first place.
"Fifth, the banks must refinance at 2% fixed rates for 15 years based on current market value.
"Sixth, the banks must inform each customer how much money they donated for the past five years to every political party, lobbying organization or political fund of any kind.
"The alternative," said Khavari, "is for us to create the Bank of the State of Florida, which can just buy all the houses from the banks at the current market value, say 50% of the original value, and issue the 2% 15-year mortgages ourselves, while leaving the families in their homes. We have already shown that this could earn billions per year for the state of Florida while saving Floridians 50% to 75% of the long-term cost of owning a home.
"This will create a thousand times more jobs than any stimulus plan or tax cut. It would stabilize our housing market at prices that are fair to buyers and to builders. And our kids will be able to afford homes, too.