Just wanted to start this thread to get some ideas out there.  I think too much negative energy is being spent on figuring out who to blame for our Economic problems and not enough positive focus on coming up with creative solutions.  These rough draft ideas are my humble attempt to put something out there to change that...

1)

Principal Reduction: Homeowners want it, Banks don't.  I believe there is a way to give principal reduction that would be less pain for banks than continuing with their current loss mitigation strategies. 

In many areas of the country there is big gap between current market value and amount owed against the property.  A foreclosure forces a lender to realize the loss immediately on books.  Why not reduce principal but create a…

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Interesting article, it says that only 25 people in the whole country have qualified for the "Hope for Homeowners" program...25 in the whole country... with the guidelines setup as they were though I'm surprised its even that high.  Despite its name this program has not exactly been what I would call a "light at the end of the tunnel" for US Households.

http://www.businessweek.com//bwdaily/dnflash/content/feb2009/db20090218_423745.htm?chan=top+news_top+news+index+-+temp_news+%2B+analysis

I do think there will be some major changes in lender willingness to do loan mods between now and end of 2009, especially with regard to their willingness to reduce principal balances, stay tuned...

Update 3/24/09:  Here is a new article from Inman News with some…

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Interesting article comparing Japanese economic recovery after real estate bubble in the 1990s that lead to severe recession and long period of deflation and decling asset values to current US economic crisis.  Lots of interesting parallels.  Hopefully we can learn from history and avoid some of the mistakes the Japanese government made...

 http://www.cnbc.com/id/29179715

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