One in five Americans owe more on their mortgage than their home is actually worth. Collectively, underwater homeowners will have to pay down $709 billion in principal before they can start building equity in their homes. Every effort to reboot the housing market to date has failed because it has not done the most essential thing: reduce the massive debt load carried by underwater homeowners.
- Create 1 million jobs every year — This includes over 300,000 jobs in California, the state hit hardest by the financial crisis.
- Pump over $70 billion per year back into communities– This includes $12 billion dollars per year in Florida, the second of the two states hit hardest by the foreclosure crisis.
- Save the average family over $500 per month on mortgage payment
- Solve the foreclosure crisis once and for all
“Homeowners across the nation are struggling to pay their boom-era mortgages with their recession-era salaries and the economy is suffering for it,” notes the report. “Writing down the principals and interest rates on all underwater mortgages to market value would serve as the second stimulus that America so desperately needs, only without added costs to taxpayers.”
As the banks have been able to profit from millions of people losing their homes,”The Win/Win Solution” demonstrates that the banks can afford to execute this plan. Last year, the nation’s top six banks paid out more than twice the cost of the plan ($71 billion per year) in bonuses and compensation alone ($146 billion in 2010). Currently, the nation’s banks are sitting on a historically high level of cash reserves of $1.64 trillion.
To help us prioritize our communities and our families and start rebuilding a working economy, join with us to demand that our state Attorneys General make principal reduction on underwater mortgages a key part of any foreclosure settlement with banks.