The Debt Realignment Initiative

For  a  global  problem  we  need  a  global  solution.


Mortgage Realignment - The Micro Application of Debt Realignment
Mortgage realignment would act as a force multiplier to global debt realignment in that it would solve the problem of derivatives in the mortgage market, allow confidence to be restored, and would, by stabilizing the housing market, make other sectors of the financial markets more secure also. 

It is but one piece of the puzzle, but a most important piece.


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The awful response to people losing their homes without adequate plans to save them is an example of people not thinking of the possibilities.  Each country can address this with mortgage realignment. And, we do not need a global summit to do this. 

All foreclosures in the United States should be immediately frozen!  No Americans should be thrown out of their home because of the economic meltdown while others get rich on their problems.  

What can be done globally with debt can be done with mortgages in the United States, and in every other country that wishes to do so; and it is easier to do because we do not have to negotiate with anyone to do it. Within the United States it is done among ourselves with a directive ordering all mortgage holders to realign. It can be done quicker than global debt realignment. The mortgage derivative threat is taken away and the threat is dramatically reduced both in America and other countries. If only America did this the results would be positive worldwide.  With all countries doing it the results would increase exponentially. 

Example:

Mr. and Mrs. Jones bought a house for $350,000. They put $50,000 down and have paid the loan for two years. The price of the house has dropped to a present appraised worth of $220,000. They owe more than the house is worth and their mortgage has gone up because of a variable interest mortgage. They are having difficulty paying the debt. Mrs. Jones has lost her job. Mr. Jones's hours have been cut back.

Solution with mortgage debt realignment: The loan is rewritten to the present day value of $220,000 at a low fixed interest rate at the order of the Federal government. The difference between what is owed on the old loan and the new mortgage is realigned as a credit, in real terms, or as a ratio to be determined, to the mortgage holder, the bank.  This should be done with every building that has a mortgage on it in America.  It would require an appraisal of each property, which would have to be regulated, but which would be a requirement to be realigned. 

The result: Mr. and Mrs. Jones can stay in their home. They can pay the lower payment. They have a very good chance at making it. The bank has the money to fix its balance sheet and now has money to loan to businesses, other home seekers, consumers, developers. Credit is available. Jobs are produced. Businesses are started. Mrs. Jones has a better chance at finding a job. Prosperity is inhanced. Payments are met. Credit Default Swaps become inconsequential.  We progress.  This can be replicated over and over again in every country. Individuals, countries, and institutions prosper. The sad chapter we are globally experiencing economically becomes a distant memory.


sj@thedebtrealignmentinitiative.com


 

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