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I have been keeping abreast of the depressing situation. Good news is that as of Friday September 3rd, the FHFA has filed lawsuits to the tune of around 200 billion against Bank of America, Merrill Lynch, Countrywide Financial, Goldman Sacks, Deutsche Bank, RBS and G.E for fraud regarding mortgage-backed securities. If this lawsuit is won by the government, the resulting monies awarded by the courts could go back to the agency’s coffers to re-strengthen it for future loans. The buzz generated by the lawsuit itself, is that there is a danger that the too big to fail banks may not survive the judgements against them. I honestly find it hard to feel any sympathy for their plight.

I’ve read about an idea that I think makes a great deal of sense. The properties that are still underwater and the homeowners who are still trying to hold onto their homes would have the mortgages modified, but not as the HAMP program has tried to do by attaching the 4 months unpaid to the tail end of the mortgage. Rather, the principal would be cut by fifty percent and the interest rate be dropped to three percent fixed. Thereby, keeping the homeowners in their homes, leaving them some money and putting those savings back into the economy. The FHFA benefits, because money is still being paid even if it is less, and less foreclosed homes means less devaluation of housing markets.

Now for those homes already foreclosed upon, offering them up as rent with intent to buy, that would help the huge population out there seeking to rent because since buying is a most impossible, the renters market is elevated. By offering the foreclosed homes as rental properties,the increased supply will help lower the prices of rentals, helping families in need. By including the intent to buy, this option will help the FHFA recoup more of its money from bad loans.

It is time for our lawmakers and federal agencies to think outside of the box and more importantly, the desire to coddle the sector that threw our whole global economy into financial chaos, has got to stop. We have had 40 years of economic and political policies designed to let the free market reign, in keeping with the republican vision. They are the champions of supply side economics. Unfortunately, we are now reaping what they have sown, and it isn’t pretty. The middle-class dream has become an illusion. There are too many things that are “hors prix” too expensive, such as health care coverage, higher education, gas, food prices, rent and on the flip side, middle-class wages have remained stagnant over the same 40 years. We need to redress the balance of power between the available advocates for the middle-class and those of big business, the scales have been tipped for far too long in favor of big business. We also need to hold big business accountable for shipping American jobs overseas. We also need to come together and enter into a national discussion about how integral living wages are to this country. We also need to come to an understanding that only with a strong and vibrant middle-class will this country re-emerge as competitive and innovative country like we used to be in the past.