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Closingcostafax.com/Mortgage Bail out Plan (Subprime Renter)
This is my idea from September of 2008 for solving the housing crisis

For any Mortgage backed asset that the U.S Government must purchase as part of the bail out bill the following rules will apply.
The loan file must contain a full appraisal by a licensed appraiser on the subject property dated no earlier than 6 months from purchase of said bad asset(All appraiser must be pre-approved by HUD)
The appraisal on the property will include a detailed market rent analysis provided by HUD
After purchase of said bad assets is completed HUD will inform the borrowers, of the following options.
A. If they are in an adjustable rate they can choose to modify their loan by converting it to a 30yr. fixed rate. The rate will be determined by taking the market rent for the subject property and adding 10% to the payment (Example: 3 bedroom home in Canton, Ma. Average rent $1,483 a $275,000 loan would be modified to a rate of 6% on a 30yr. fixed and a new payment of $1,648 principal and interest)
B. If the borrower is in default and cannot afford to make the payments on the current mortgage and cannot afford the new payments on a modified loan. Borrower has the option of selling the property to the government for $1.00 and renting the house back at 10% below the market rent for 5 yrs. (Example: 3 bedroom home Canton,Ma.Average rent $1,483 minus 10% borrower could stay in home for $1,334 per month plus taxes) Insurance will be paid by the original seller of the bad asset. At the end of the 5 yr period HUD will put the property up for sale. Borrower will have first right of refusal and a 20% discount on the sale price.(If all payments have been received on time) The entire rent will be tax deductible
C. If borrower cannot afford option A or B they will have 6 months to secure another property owned by the government that they can afford (Example: Borrower A cannot afford the $1,483 payment on his or her current home they turn it over to the Government to rent or sell to someone else and rent another home from HUD that they can afford.

By allowing the borrowers to stay in the properties under anyone of these options the Government will accomplish the following.
1. It will greatly help stabilize property values by decreasing the number of discounted bank owned properties on the market that hurt all home owners’ values.
2. Millions of families would be able to stay in there homes with the hope of purchasing them back in the future.
3. HUD would be able to keep up a cash flow to of set the 700 Billion dollar bail out
4. Would discourage borrowers from walking away from their loans to go rent across the street for less.
5. Neighborhoods would not have vacant houses that add to blight and crime.
6. After 5 yrs the Government should relies some equity increase in property values
7. Borrowers would be more likely to up keep the properties.