I think your plan is excellent (much like what I proposed in the “call your representative” thread). 😉
The only thing I would disagree with is the loans for new mortgages. The govt should not be in the mortgage business, as it will continue to distort prices. Besides that, many of the current homes on the market will still lose over 30%, and the 10% down will lead us to the same problems we have today, except the govt is directly on the hook.
I think there is plenty of money out there (both to buy houses and to make mortgage loans), but we are not willing to pay prices that were determined by specuvestors with Monopoly money.
There is lots of evidence that the hardest-hit areas are already seeing huge increases in sales volume and multiple bids. We need to get there with the rest of the market, and there’s nothing that can do that better than letting prices drop to such levels that people who have something to lose (significant down payments and good credit) will step up to the plate.
We need tighter money, and that is a GOOD thing. This whole notion that debt = wealth needs to be put to rest, permanently. Debt is the means used to transfer money from the poor/weak to the strong/wealthy. Self-liquidating debt is okay, but consumer debt (including mortgages) should be wound-down significantly, IMHO. Let the poor people save for a change.
