I was just on the phone with a mortgage professional with Wells Fargo. The call was originally intended for me, the consumer, to see if there was a lower interest rate for my adjustable home loan. The conversation was very consumer oriented and I believe they were really trying to see if they could better position me. Fortunately I have the best deal already and there was little they could do, short of forgiving my loan entirely, which they won't do.
The subject came up about real estate in general here in Huntington Beach CA. I told her I just read a report in the OC Register that sales were really down, my business was slowing, I was spending a ton of money on marketing, and I've an idea on how the banks could work to turn the economy around. Here it goes. Let me know what you think...
First, I think the banks should lower the payments for families that have honestly run into hardship. They would first conduct a forensic audit of the loan documents to be sure it wasn't one of those stated income loans. Second, they would to a complete assessment of the homeowners financial picture. Next the bank would then give them a mortgage payment they could afford. The time period for this would be for one year and each year another review would be done and the payment would be adjusted accordingly.
Now that the home owner has more money left over at the end of the month, they will put it back into circulation. In other words, they would spend the money. With enough homeowner compassion loans, the economy would take off. Sure it would be slow to start but it would be great.
