Stop Making Your Mortgage Payments by Leonard C Tekaat

To end the recession quickly there are four objectives that must be met.

1.More money must be created in the private sector to increase demand.

2.A majority of people in the economy must receive this money.

3.People's monthly outlays must not increase.

4.The Federal Government's deficit must not increase. It must be reduced.

Increasing taxes or decreasing taxes does not meet these objectives. Increasing taxes increases people's monthly outlays. Decreasing taxes increases government's deficits.

There is only one thing that meets all four objectives. The lowering of mortgage interest rates and the forgiveness of that portion of the mortgage that makes the home underwater. Underwater meaning the home will not sell for as much as the unpaid balance of the mortgage.

When people refinance their homes, at a lower rate of interest, their monthly outlays will decrease. This leaves more of their income to cover other expenses and purchases, thereby increasing economic activity. As the money supply increases prices and employment will stabilize and then increase.

When mortgage holders forgive the amount of the mortgage that causes the home to be underwater, they will not need to go thru a foreclosure, which is costly and time consuming. The mortgage will become a performing asset, making it more valuable and easier to sell.

All homes that are under water will need to have their mortgages adjusted, sold by short sale or foreclosed upon, for the economy to fully recover.

If the mortgage holders, of the homes that are underwater, are hoping that home prices will return to the high prices of early 2007, they are not going to see it happen. Foreclosures are increasing as unemployment increases. More people are growing wary of paying payments on a home that cannot be sold for the amount of the mortgage. The mortgage holders are more likely to end up with a foreclosure on their books, unless they come to realize the reality of the situation. Banks, mortgage holders and financial intuitions will make more money in a working economy that is expanding, than the amount of money they will be forgiving.

The Capitalistic entity of our economy should remember, that they played a pivotal role in the creation of the currant economic crisis and therefore should bear some of the cost of correcting it. If the entity does not come to this conclusion, then the Tea Party organizations should organize a national protest by all homeowner that are underwater to stop making their mortgage payments. All the people who do not have a home that is underwater should support the protest because this recovery plan will increase their homes value by decreasing the amount of foreclosures in their neighborhood. By stopping payments, by a large amount of people, will get the Capitalistic entity's attention. They will be more likely to participate in this economic recovery plan.

People should be informed that being behind in their mortgage payments is the only way they will qualify for any of the government's home affordability programs.

The refinancing and adjustment of all mortgages will increase economic activity and end the recession quickly.

About the Author

Go to http://economysflaw.wordpress.com/ for more economic policy papers by the author. Repeating the Mistakes of the Great Depression, Is President Obama Making a Mistake, The Zero Inflation Taxation Policy, Reduce Oil Imports Without Cap and Trade, Reform the Health Care Market System and others.