- Treasury Direct, No Debt-Money, Home Loans -
"According to a new report by Deutsche Bank half of U.S. mortgage- holders will be "underwater" or "upside down" on their loans by 2011 that is, they will owe more on their loan than their property will be worth. And it's not just those risky subprime borrowers who will feel the pressure of the rising debt waters (although the report suggests up to 69% of home "owners" in that category will be submerged)"
The utter failure of the home loan lending system and securitization scam is now readily apparent. The remedy is to take the entire home loan business out of the hands of Wall Street and place it in the hands of our Treasury department thus enabling direct funding of home loans to local banks with no-debt money created by and for the people to fund their most important asset.
The home is the building block and bedrock of society. People from time immemorial have contributed to building one another's abodes. Barn-raisings have always been a community project it's what people do. We need to do this with home loan financing from our own Treasury, and fund thru local banks where the loans will reside.
The essence of Single Lender is the same principle as single payer health insurance which, had we enacted we would not now be in the clutches of an avaricious, for-profit, health insurance industry and would have some control over prices. Given the incredible profit-driven chaos and predation in the home loan industry it is time we, the people, took control of our most important asset financing program and escaped from the hands of Wall Street and private banks which, by their nature, have no interest in the public interest.
What else should our treasury be for but providing stable, low-interest, loans for housing? There no need for the incredible variation of financing products structured for the benefit of lenders and utterly dangerous to the financial health of the people. The millions now homeless and/or on the verge of bankruptcy due to Wall Street's control of our monetary and trade policy is testimony to the need to completely change the system.
Given that we, the people, already guarantee the vast majority of mortgages thru Fannie and Freddie (quasi-private entities dependent upon debt-money) the leap to complete control of home financing is a small one. The important step is, as the Founders intended, using our own money and credit and not money borrowed, at interest, from the "Fed" - a private central bank largely out of our control. The government could even buy up all outstanding mortgages with non-debt money (perhaps requiring a legal tender amendment) and gain a counterbalancing asset with the liability in the process.
While the "Fed" is now keeping interest rates low it is also causing the dollar to decline, and certain to generate future inflation. This current policy is all in order to make up for a dumb and undemocratic "free trade" system wreaking its havoc on our economy and our lives.
However, the reality of a free trade and deficit devastated system the like the US economy is that interest rates will eventually go up, and many predict drastically.
Today there are not many who remember the 1979-82 period when Paul Volker, as head of the Federal Reserve at the time, in a monumental gesture of overkill took interest rates to fourteen per cent on treasury bills! The economy came to a complete halt, many were ruined, and it was impossible to get a mortgage. As a result, the wreck of the real estate industry and many homeowners was complete: completely unnecessary suffering and financial punishment.
Had people then been able to count on, say, stable three per cent, non debt-money, home loans from the Treasury thru this period then an incredible amount of serious economic and social pain would have been avoided. The very same will be true in the future if we have the intelligence to reform a seriously broken home loan system. If we do not, we open ourselves to future chaos of which we can hardly conceive of today.
In 1913, however, we lost control of our banking and monetary system to powerful private interests. From that time on the predation, usury, and financial panic and ruin began only to be repeated time and again due to a profit-driven, debt-money, private banking system destroying our lives, economies, communities and public interests. Today, even the Fed has lost control of mortgage interest rates and foreign bank libor-set rates, and due to the idiocy of our "free trade" straightjacket we will pay the cost in dollar depreciation.
In short, we don't own our homes or control our credit or interest rates this is the worst of worlds. To avoid further catastrophe we need to take the home loan system out of this predatory, for-profit, commission-driven, gerry-rigged, privatized setup before the foreclosed begin to riot in the streets and, in response, a cruel bankster-driven fascism descends.
As the founders intended we can create our legal-tender money (not based on debt and interest-bearing bonds) to make home loans thru existing banks and credit unions the only difference being the source of funds, the rate and terms, where the loan stays, and far greater penalties for fraud and abuse. Home loans should emerge from and permanently reside with local banks and communities, all funded with Treasury-direct funds via existing banks.
We can make stable, three percent, fixed home loans with treasury-created funds which support, rather than undermine, a consumer-based economy. We can provide for loan payment postponements in event of job loss. We can use the interest paid back to our treasury to fund more home loans, and even pay down government debt. We can act like human beings... when we, the people, control our monetary system and the very bedrock of our society and economy.
We've already guaranteed home loans and spent huge bank bailouts with our taxes and debt-money servitude, but all without regaining control over our monetary system as in taking back the stock of the "Federal" Reserve. In any case, we can and should separate commercial banking and home loan banking at this juncture. Only then can we proceed to unravel the idiotic, utterly confused and incredibly costly, state of securitized and privatized home loans.
The only way to clean up the home loan mess the basic problem in our deeply depressed economy is to nationalize the home loan system. We can then stop pretending that Fannie and Freddie are private companies and proceed to take over what we have already guaranteed and bailed out. We already guarantee the loans its time now for the people to own their own home loans and avoid the sheer idiocy of chopping up mortgages into pieces and selling them to foreigners for the benefit of Wall Street.