Letters to the Editor

Re: 'Dems: Foreclosure losses could top $100 billion' (Oct. 25)

Dear Editor:

To me, this carnage should be fixed by the companies that created it -- period. These loans that are foreclosing at such enormous rates could be salvaged if the Bush administration mandates that those lenders who approved the defaulting loan be required to modify it (loan modification). Tack the arrears on to the rear of the loan (not a repayment plan up front) and lower the interest rate to a buy-down rate of 5 to 5.5 percent (which the buy-down is paid for by the lender) for qualifying persons. Now the lender is technically only losing the buy-down rate and not $100,000 or more in short sale or REO sale discounts.

For those who got in on really bad teaser rates of 1 percent, etc., the lender may have to do the same as above and stretch the loan to a 40- or 50-year term.

Right now is not the time for small Band-Aids on a major rupture; it is the time for the lenders to aggressively get in there and fix the problem that they created by approving the loan terms for the respective buyers that anyone could see would be hurt in the near future, and the impact to the economy and jobs (retirement accounts, investments, retailers, and on and on) is staggering and only going to get worse.

Since the lenders are not taking an aggressive stance in stopping this snowball, then it needs to be mandated now -- and I believe this action will also benefit the lenders over what they are now facing and what action they have taken thus far.

After action is taken to abate this problem aggressively, they figure out what reforms you want -- just take care of the problem first, and then the cause, so we won't have a repeat.

Leanne Noble
The Noble Team
Diamond Bar, Calif.

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