DO BOTH – fix Housing and the Economy
Almost every morning I usually end up having a very interesting and intellectual conversation with a good friend David A. Ross, Esq – what one of us heard/read in the news or even a situation with a friend usually sparks it. Each of these were a conversation in itself – sometimes lasting hours
(1) Many Small business start-ups use home equity to launch – and most people don’t have a lot of equity (if any) now. This directly impacts the number of NEW small businesses and the ability for an existing business to expand.
(2) Many small businesses start in the home – if ‘m months behind on the mortgage and worried about packing/moving and where I’ll live – becoming an entrepreneur is low on the list of priorities.
(2) Chicken or the egg – you can’t fix housing without fixing the economy AND you can’t fix the economy without fixing housing. – it needs to be comprehensive not piecemeal.
(4) Fannie & Freddie – we need to keep them. Markets can not function w/o them – pooling is the only way for the market to work efficiently – imagine trying to sell ONE MORTGAGE at a time to keep the cash flow going.. Stringent standards for the mortgages that go into the pools is a better idea.
(5) Tax foreclosure profits – this will force the banks to work with the homeowner and not pay tax on their profits (and there are huge profits – look at the banks’ balance sheets, dividends and earnings). They write the loss off in full on one side and don’t pay tax on the other side. They might be much more willing to work with the homeowner if it affects their bottom line.
(6) Form a REIT, the banks transfer their foreclosed properties to the REIT and these are then rented out and professionally managed. Puts these homes back into the housing market allowing people to be able to save to buy a home while renting (high rents limit one’s ability to save).
This was actually my reply to a post by Ron Phipps
