In an article at RISMedia.com, the bold statement is made that by writing down all underwater mortgages to market value, the nation’s banks would pump $71 million a year into the economy, and would create more than one million jobs/year by saving families an average of $6500/year on mortgage payments.
This report came from the New Bottom Line campaign, aligned with other grassroots organizations calling on states’ attorneys general who are investigating the banks and their foreclosure activities. These organizations are pushing for a firm stance by the states to force the banks into large-scale principal reduction for underwater homeowners.
The proposed plan would lower homeowner mortgage payments an average of more than $500/month, or $6500/year. That’s $6 billion/year currently going to mortgage payments that would be back in the economy as consumer spending.
One bit of ammunition for their arguments is that last year the nation’s top six banks paid out more than twice the cost of this plan ($71 billion) in bonuses and compensation alone ($146 billion in 2010).
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An interesting idea for the economy
That is so interesting - in fact, without having seen this yet this similar discussion was happening with a co-worker this morning. She was saying this very thing about how banks should re-work mortgages to reflect their current value and how that seemed to her to be a good idea for homeowners and the economy. I look forwarding to hearing how this will fare going forward.
Two Big Thumbs Up from Peacenik
I so agree.
peace, : )
I definately agree!
I definately agree: the banks should get off their behinds and start looking at the actual home values because more often than not the values are too low for the mortgage payment. Why can't they see if they lowered the payments more people would keep their homes instead of letting them go back to the bank or abandonning them. Use your head banks!!!