Updated from my original OpEdNews.com article of October 28, 2008 -- Kent Welton
"I don't rule anything out from the Federal Chairman proposing, this Friday, a nationwide refinancing option for all agency Government Sponsored Entities (GSE) mortgages. The "white elephant in the room" is the reason home valuations continue to drop. If homeowners are underwater on their mortgage by an increasing amount, there is an increased rationale for the homeowner to walk away from the mortgage. Providing a Federal nationwide refinancing option would address the increasing number of GSE mortgages which are under water. Who wants to buy a home when they read headlines that 2nd quarter home values dropped by 5.9%? Potential Federal refinancing programs could include the following aspects: An easy to obtain restructured GSE mortgage. Interest rates could be capped at 2-3%. A plan to revise the home GSE mortgage loan to current market values. This would reduce the number of "mail in my keys" and walk away from the house and mortgage."
Todd Johnson, SeekingAlpha.com, August 25, 201 1
TREASURY DIRECT HOME LOANS - FIRE THE FED
"To suggest that there's a large place for private financing in the future of housing finance is unrealistic. Government is part of our future. We need a government balance sheet. To suggest that the private market come back in is simply impractical. It won't work."
Bill Gross, Pacific Investment Management
Recently, Bill Gross, who runs the world's biggest bond fund, said the U.S. should consider "full nationalization' of the mortgage-finance system. Clearly more people are realizing the predatory idiocy of "our" housing finance system cannot go on if we are to have a stable and fair consumer-based economy.
With our home loans there is no reason why we, the people, exercising the very purse power of our Constitution, cannot get home loans direct from our own Treasury. In doing so we can agree to establish stable low or no-interest home loan programs. In this way we provide reasonable mortgage vehicles not subject to the predation, interest rate and terms changes, and other disruptions of the private market. The private home lending market has proved itself an utter disaster, a predatory and even criminal enterprise, one we have seen over and over again lead to incredible chaos, pain and suffering - and all this with the very asset that is the foundation of our lives, family, and society.
Given a non debt-money based lending direct from our own Treasury, provided via existing banks and credit unions whether public or private, we can once and for all escape the banksters system that has destroyed so many lives and the economy as a whole. The carnage in peoples lives resulting from the Wall Street home loan system is beyond description
With new legal tender laws to escape the "Federal Reserve" money and credit creation monopoly we avoid all the secondary market chaos and Wall Street criminality we see today and which has cost taxpayers billions in bail-outs to bankers - i.e., the very ones who abused and raped the system. With private debt-money, the social harm and costs spread to other markets and mean more banker bail-outs with yet more money which must be borrowed at interest from a private cartel that creates it out of thin air. Were a public home loan bank system in place, all the chaos could have been and will, in the future, be prevented with a stable low or no interest system of Treasury-direct home loans.
In practice a treasury direct system is simply a friendly local community bank writ large, and one funded not by debt-money but stable treasury direct, non debt-money, financing for the most important asset in our lives. It will be funded and managed thru local banks with greater penalties for fraud and abuse. Forget the taxpayer guarantees for a predatory, private, debt-money, home loan system. We have already seen how this approach has cost us trillions in debt and ruined lives.
If, for example, we adopted a regime of three percent fixed home loans - all funded thru local banks, savings and loans, and credit unions we could then have stable, low-interest, home loans with one big difference -- i.e., the source of funds.
Not only would we not be paying this low interest to and thru the debt-money bond dealers who own the Federal Reserve but the interest, if any, would be paid directly into our public Treasury. Such funds could then be used to make new loans or go to reduce our taxes or fund infrastructure -- all without debt-money chicanery and slavery to a private cartel.
Our problem to date is that we are not likely to hear of any such options because the corporate "free press" and our corporate-financed, bankster-driven, politicians dare not speak of such "radical" proposals or any such freedom from the iron grip of the "Fed" cartel - and this despite the clear constitutional "purse power" directive handed down to We, The People. These lackeys would cry "socialism" in order to keep you tied to the very banksters our Founding fathers fought to escape and keep future generations from becoming their victims. It is privatization that is bankrupting us and stealing our assets and even our ability to work as a truly free community, state, and nation.
Today's situation of forced free trade, forced globalization, and ruin of the middle class and First World Standards creating the very chaos from which we can gain the courage to begin to reclaim the "Fed" stock and completely revise our home finance system, not to mention our government debt-money bond system. With all the government guarantees in place in the mortgage market, we already have partially nationalized home finance. With the removal of these guarantees homes loand will become increasingly expensive and hard to obtain. We will remain at the mercy of Wall Street and private bankers instead of establishing a simple treasury-direct system home loan system.
Nothing is more indicative of the stone cold oligarchy within which we are trapped then the absence of any discussion of exactly such a program. Must we wait until the system collapses under the weight of forced debt-money, and the fascist parade beings in earnest, to hear a discussion of Treasury-direct home loans, nationalization, state banks, or a public central bank in this "free country" of ours? Must we eternally bow down before the money God, Goldman Sachs, a promethean too-big-to-fail entity wherein our Treasury Department appears be be nothing more than an in-house subsidiary?
Real home loan reform is not only possible today but absolutely necessary. First, however, something other than complete private bankster control must be broached and freely debated not only in Congress but in a media free of corporate control (see EditorFreedom.com). This is a tall order at present as the "weapons of mass distraction" are currently out of our hands -- despite the fact the public owns the airwaves we still have no say in editorship.