One man’s approach to fix mortgage mess

To the editor:

The economic situation in this country is getting worse. Many people I know are losing their jobs or are afraid they will lose them. I work for a school district in the state of New Hampshire, and I am concerned for myself as well.

The government is trying its damnedest to rectify the financial situation. They are not sure what will work and what will not. It is clear they are not standing idly by and allowing our country to crumble. In some instances, they are looking at things in a very complicated manner.

One of these areas is the mortgage crisis and the use of the Troubled Assets Relief Program money. The original mortgage loans are themselves a complicated mess. All that creative financing was done to put people in homes that they could not really afford. These loans need to be extracted from our financial system. We cannot give the banks a free ticket to solvency by taking all the toxic assets upon ourselves (the taxpayer).

The government represents us, the common everyday people, and has an obligation to listen to us. The government should keep a clear head in this crisis and listen to the citizens. We the people have common sense and are very level-headed. Eliminating these complicated mortgage loans can happen, and then we can begin to start a whole new process of recovery in this sector for our fellow citizens who are immersed in this mess.

It does not have to be so complicated. Here is a simple solution to mortgages and the TARP money:

•Determine which mortgages are in trouble

• The government pays off these mortgages

• The bank is then required to rewrite the mortgage as a regular mortgage – no creative financing tools – for a period of 30, 40 or even 50 years in some instances

•The banks would be required to write these loans at low interest rates

• The government would then guarantee the difference between the current value of the property that the new loan would be written and the original loan value

• The bank would make the loan

• The recipient of the money (proceeds) from the bank would be the government. We get our TARP money back. The toxic assets in this area would be eliminated.

Steven McClellan
Nashua