How Sweet The Sound

Here's where I get confused: the banks were given taxpayer money to buoy the hardships of September 2008, but none of that grace has trickled back down to the average citizen. Most banks have paid back their TARP loans and they're back to doing what they do best: earning money.

But not lending money. Weird, huh?

As is probably evident on your street, foreclosures are up; in fact, the first three months of this year we had a record number foreclosed homes.

Yesterday, the government announced yet another program to help mend the busted housing bubble: the Making Home Affordable Foreclosure Alternatives (HAFA) program. Really? We need yet another program to implement common sense?

Color me confused, but this all seems silly. Banks are repossessing homes that they don’t want (because they can’t resell them) and people are being forced out of the homes that they do want. In the midst of all of this, neighborhoods are becoming scarred with abandoned homes full of busted plumbing, over-grown lawns, and prime-for-the taking copper wiring. This is bringing down the value of homes whose owners have only done the right thing, and it’s causing everyone to financially freak out.

Is it me, or is this a bit backwards?

How about we institute a Making Banks Reciprocate the Grace They Were Given Back in 2008 to Underwater Homeowners (MBRG) program? Here’s how this common sense program would work: banks would go through their backlogs of cruddy loans and restructure some of the payments. After all, I might not be able to pay you my $2100 a month mortgage, but I can afford to give you $1200 a month. Last time I checked, $1200 was more than $0.

It's a win-win: families get to stay in their homes and banks get to keep the checks.

Yup, this will take time and effort on the banks’ part. And, it may just cost them to only earn $14 billion this year and not the $14.2 billion they were expecting. In this economy, we all have to sacrifice a little.

What’s that, you say? It’s not their responsibility? You’re absolutely right - it’s not their responsibility to restructure payments anymore than it was the taxpayers’ responsibility to bail them out 18 months ago.

Grace is a two-way street.