Lamar Alexander's proposal that we make mortgages at 30 year, 4% fixed, and assumable would probably be very effective at reviving the economy. Over 2,000 companies that have signed on to the plan can be seen listed at www.fixhousingfirst.com . Jerry Doyle has been championing the plan all this week on his radio station out of Las Vegas.
But, here is an even BETTER plan. How about we eliminate the idea of INTEREST on ANY and ALL forms of loan and borrowing and go to a FEE-BASED system instead. I hear this is the system throughout the Islamic world and was the way of ancient Israel. It is Biblical. I don't see anywhere that it is a LAW of God's that we should not loan at interest, but He does say in many passages that He will LOOK to the one who does NOT loan his money out at interest. This should apply on the nation scale too. And we certainly could use a little 'looking to' from God now, couldn't we?
I have long thought it downright IMMORAL the way our mortgage system has always worked. After a typical 30 year mortgage, a buyer winds up having his, say, $150,000 principle while the bank winds up with another $300,000 of the buyer's life income! This is a very different kind of loan than ones we used to take out to buy an appliance! On a FIXED FEE system, a $150,000 house would have 10% added to it with the total then broken up into monthly payments. This case would see the buyer make 180 payments of $916.67 over 15 years. The banks would make a lot less than their out-of-control GREED now demands, but American families would be far more financially stable.
After we bailout our banks with over SEVEN TRILLION DOLLARS, are we still going to allow them to continue SOAKING us with the same old style EVIL mortgages? Let's stop this INSANITY now!